Part II Answer the following questions. (35 points; as indicated) 1. Round Hammer is comparing two different capital structures: An all-equity plan (Plan 1) and a levered plan (Plan II). Under Plan I, the company would have 285,000 shares of stock outstanding. Under Plan II, there would be 130,000 shares of stock outstanding and $2.29 million in debt outstanding. The interest rate on the debt is 5 percent and there are no taxes. (6 Points, as indicated) (ILOS: A1/B1/B3) a Use M&M Proposition I to find the price per share. (1.5 Points) (Do not round intermediate calculations and round your answer to 2 decimal places) Share price b. What is the value of the firm under each of the two proposed plans? (1.5 Points) (Do not round intermediate calculations and round your answers to the nearest whole dollar amount) Firm Value - Plan! Firm Value - Plan 11 C. How the company's value will change if the corporate tax rate is 40%, while debt is perpetual? (2 Points) Firm Value d. In which conditions, your answers in (b) above will be valid? (1 Point)