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Hi part a is answered could someone help me with part b? Thank you! (25 points) Value of Value of Stock Amount Borrowed Equity the

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Hi part a is answered could someone help me with part b? Thank you!

image text in transcribed
(25 points) Value of Value of Stock Amount Borrowed Equity the Firm Price WACC EPS 0 18,460 18,460 18.46 13.0% 2.40 $ 2 Million 17,320 19,320 19.32 12.42 2.55 $4 Million 15,830 19,830 19.83 12.10 2.70 $ 6 Million 14,020 20,020 20.03 11.99 2.54 $ 8 Million 16,570 24,570 24.57 11.50 3.04 $10 Million 12,000 22,000 22.00 12.00 3 .20 NOTE: Value of the Firm is equal to the Amount Borrowed plus the Value of Equity a) Falco Inc. is considering a debt issue and is trying to determine the appropriate amount to issue. Considering the information in the table below, indicate which amount borrowed you believe to be the optimal level of debt and explain completely why. b) Part of our discussion about the optimal capital structure problem considered a set of equivalent problems (and one additional problem that was not equivalent) that could be solved and analyzed using graphical solutions. Graphically demonstrate the optimal level of debt using the information from the table above. lfytm are unable to using graphing because of technical issues related to remote learning, please describe each afllre problems verbally

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