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Faulkners Fine Fries, Inc. (FFF) is thinking about reducing its debt burden. Given the following capital structure information and an expected EBIT of $50 million

Faulkners Fine Fries, Inc. (FFF) is thinking about reducing its debt burden. Given the following capital structure information and an expected EBIT of $50 million (plus or minus 10 percent) next year, should FFF change their capital structure? CURRENT PROPOSED Total assets $750 million $750 million Debt $450 million $300 million Equity $300 million $450 million Common stock price $30 $30 Number of shares 10,000,000 15,000,000 Interest rate 12% 12%

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