Lewis Skates, Inc., an all equity firm, expects to earn $6.80 per share for each of the future operating periods (beginning at Time 1), if the firm makes no new investments and retums all earnings as dividends to the shareholders. However, Clint Eastman, president and CEO, has discovered an opportunity to retain and invest 10 percent of the earnings beginning two years from today. This opportunity to invest will continue for each period indefinitely. He expects to earn 10 percent on this new equity investment (indefinitely), the returns beginning one year after each investment is made. The firm's equity discount rate is 15 percent. A. What is the price per share of Lewis Skates, Inc., stock without making the new investment? B. If the new investment is expected to be made, per the preceding information, what would the price of the stock be now? C. For the following two questions, assume that the agency costs of free cash flow (the free cash flow hypothesis) are a serious concern, serious enough to override other considerations for this project. Respond to the following two parts in 150 words combined (hard limit) or (preferably) less. (i) Do you think Clint Eastman is likely to approve the project? Why? (ii) If you were an equity investor in this firm, would you prefer that the firm to change its capital structure? Why? Respond based on only the considerations explicitly noted in the