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Foundation, Incorporated, is comparing two different capital structures: an all-equity plan (Plan 1) and a levered plan (Plan 1). Under Plan I, the company would

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Foundation, Incorporated, is comparing two different capital structures: an all-equity plan (Plan 1) and a levered plan (Plan 1). Under Plan I, the company would have 190,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stock outstanding and $1.95 million in debt outstanding. The interest rate on the debt is 8 percent and there are no taxes. a. Use M&M Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the value of the firm under each of the two proposed plans? (Do not round intermediate calculations and round your answers to the nearest whole dollar amount, e.g., 32.) a. Share price b. All-equity firm value b. Levered plan firm value

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