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finch, Incorporated, is debating whether or not to convert its all - equity capital structure to one that is 2 5 percent debt. Currently there

finch, Incorporated, is debating whether or not to convert its all-equity capital structure to one that is 25 percent debt. Currently there are 12,000 shares outstanding and the price per share is $56. EBIT is expected to remain at $36,000 per year forever. The interest rate on new debt is 9 percent, and there are no taxes
Allison, a shareholder of the firm, owns 100 shares of stock. What is her cash flow under the current capital structure, assuming the firm has a dividend payout rate of 100 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.
What will Allisons cash flow be under the proposed capital structure of the firm? Assume that she keeps all 100 of her shares.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.
Assume that Allison unlevers her shares and re-creates the original capital structure. What is her cash flow now?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.

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