Omega Corp. currently has 100,000 shares of stock outstanding but is planning on issuing debt in order to buy back stock.Their EBIT is a constant $1,000,000 regardless of how much debt they issue and they pay all net income out as dividends.Their tax rate is 40%. They have estimated the following costs of debt and costs of equity for various levels of debt.

			EBIT =	1,000,000	Tax Rate =	40%		Share	Shares
Debt	Kd	Ke	Net Inc	StkValue	FirmValue	Debt %	WACC	Price	Outstding
0	6.00%	11.00%	600,000	5,454,545	5,454,545	0.00%	11.00%	_______	100,000
500,000	6.30%	11.40%	581,100	5,097,368	_________	8.93%	10.72%	55.97	91,067
1,000,000	6.80%	12.00%	559,200	_________
1,500,000	8.00%	13.00%		4,061,538	5,561,538	26.97%	10.79%	55.62	_________
2,000,000	9.50%	14.50%	________
2,500,000	11.50%	16.50%		2,590,909	5,090,909	49.11%	_______
3,000,000	14.00%	19.00%		1,831,579	4,831,579

What will their Net Income be if they issue $2,000,000 in debt?

What will their Stock Value be if they issue $1,000,000 in debt?

What will their WACC be if they issue $2,500,000 in debt?

What will their Share Price be if they issue $0 in debt?

What will their Shares Outstanding be if they issue $1,500,000 in debt?