f Zippy Pasta Corporation (ZPC) has a constant growth rate of 6.5 percent. The company retains 35.0 percent of its earnings to fund future growth. ZPC's expected Earnings Per Share (i.e. EPS at t=1) and required cost of equity for various capital structures are given in the table below. Debt/Total Cost of Expected EPS Assets capital 20% $2.56 15.00% 30% $3.11 15.50% 40% $3.56 16.00% 50% $4.08 17.00% 70% $4.31 18.00% What is the highest stock price for these combinations of capital structure? (Give answer to 2 decimal places) m 22 ed out of Tempquin Motors is an all-equity firm with a total market value of $220 million. It's annual before tax operating income (EBIT) is $34.75 million and expected to be stable for the distant future. The firm has 10 million shares outstanding. Tempquin has no future growth opportunities so pays out all its earnings as dividends. The firm is contemplating a recapitalization plan which involves borrowing $85 million in debt at the rate of 4.0% and using the proceeds to buy back some of its shares. This plan will not alter the size or capability of the operations, so operating income is expected to remain unchanged. The plan will also not affect its dividend payout policy. o norfect canital markets. g Ton