Narrative 2. An all equity company has hired your consulting firm to analyze the effects of moving the company to a new capital structure. The company wants to know the effects on EPS, ROE, and ROA. Currently, the company has 500,000 outstanding shares and expects EBIT in the foreseeable future of $1,500,000.

The cost of capital is 8%. The company will issue debt for $6,500,000 at 4% and use the proceeds to repurchase equity.

A. Under the current capital structure, how much are the assets of the company worth?

B. Under the current capital structure, how much is the company's equity worth?

C. Under the proposed capital structure, how much is the company's equity worth?

D. Under the current capital structure, what is the company's debt to equity ratio? Enter your answer in percent, do not use the percent symbol, round your answer to 0 decimals.

E. Under the proposed capital structure, what is the company's debt to equity ratio?

F. Under the current capital structure, how many shares does the company have outstanding?

G. Under the proposed capital structure, how many shares does the company have outstanding?

H.Under the current capital structure, how much is the company's net income? Ignore taxes.

I. Under the proposed capital structure, how much is the company's net income? Ignore taxes

J. Under the current capital structure, how much is EPS?

K.Under the proposed capital structure, how much is EPS?

L. Under the current capital structure, ROE is

M. Under the proposed capital structure, ROE is

N. Under the current capital structure, ROA is

O. Under the proposed capital structure, ROA is

P. if the company approves the new capital structure, it must make sure

Q. How much is the breakeven EBIT?