Please answer the following in a clear and concise format with 
excel formula
Stephenson Real Estate Comparry was founded 25 years ago by the current CEQ Robert Stephenson. The comparry purchases real estate, including land and buildings, and rents the property to tenants. The company has shown a profit every year for the past 18 years, and the shareholders are satisfied with the compary's management. Prior to founding Stephenson Real Estate, Robert was the founder and CEO of a failed alpaca farming operation. The resulting barikruptcy made him extremely averse to debt financing. As a result, the comparyy is entirely equity financed, with 8.7 million shares of common stock outstanding. The stock currently trades at $46.50 per share. Stephenson is evaluating a plan to purchase a huge tract of land in the southeastern United States for $65 million. The land will subsequently be leased to tenant farmers. This purchase is expected to increase Stephensoris annual pretaxearnings by \$14 million in perpetuity. Kim Weyand, the comparny's new CFQ has been put in charge of the project. Kim has determined that the comparn's current cost of capital is 12.5 percent. She feels that the comparry would be more valuable if it included debt in its capital structure, so she is evaluating whether the company should issue debt to entirely finance the project. Based on some comversations with imestment banks, she thinks that the comparry can issue bonds at par value with a coupon rate of 8 percent. From her analysis, she also believes that a capital structure in the range of 70 percent equity/30 percent debt would be optimal. If the compary goes beyond 30 percent debt, its bonds would carry a kwer rating and a much higher coupon because the possibility of financial distress and the associated costs would rise sharply. Stephenson has a 21 percent corporate tax rate (state and federal). Grout area. Output area. If Stephenson wishes to maximize its total market value, would you recommend that it issue debt or equity to finance the land purchase? Explain. You are given the following information concerning Parrothead Enterprises: Debt: 9,7007.2 percent coupon bonds outstanding, with 23 years to maturity and a quoted price of 105.75 . These bonds pay interest semiannually. Common Stock: 260,000 shares of common stock selling for $65.20 per share. The stock has a beta of .97 and will pay a dividend of $3.40 next year. The dividend is expected to grow by 5.2 percent per year indefinitely. Preferred Stock: 8,700 shares of 4.6 percent preferred stock selling at $94.70 per share. Market: 11.3 percent expected return, risk-free rate of 3.95 percent, and a 22 percent tax rate. input Area: s-This quoted price is not listed as a rate, but reporting at what percentage the bo s-This quoted price is not listed as a rate, but reporting at what percentage the rec =(Rw)=(Rt) Complete the following analysis. Do not hard code values in your calculations. Leave the "Basis' input blank in the YIELD function. You must use the built-in Excel function to answer this question. Output Area: Stephenson Real Estate Comparry was founded 25 years ago by the current CEQ Robert Stephenson. The comparry purchases real estate, including land and buildings, and rents the property to tenants. The company has shown a profit every year for the past 18 years, and the shareholders are satisfied with the compary's management. Prior to founding Stephenson Real Estate, Robert was the founder and CEO of a failed alpaca farming operation. The resulting barikruptcy made him extremely averse to debt financing. As a result, the comparyy is entirely equity financed, with 8.7 million shares of common stock outstanding. The stock currently trades at $46.50 per share. Stephenson is evaluating a plan to purchase a huge tract of land in the southeastern United States for $65 million. The land will subsequently be leased to tenant farmers. This purchase is expected to increase Stephensoris annual pretaxearnings by \$14 million in perpetuity. Kim Weyand, the comparny's new CFQ has been put in charge of the project. Kim has determined that the comparn's current cost of capital is 12.5 percent. She feels that the comparry would be more valuable if it included debt in its capital structure, so she is evaluating whether the company should issue debt to entirely finance the project. Based on some comversations with imestment banks, she thinks that the comparry can issue bonds at par value with a coupon rate of 8 percent. From her analysis, she also believes that a capital structure in the range of 70 percent equity/30 percent debt would be optimal. If the compary goes beyond 30 percent debt, its bonds would carry a kwer rating and a much higher coupon because the possibility of financial distress and the associated costs would rise sharply. Stephenson has a 21 percent corporate tax rate (state and federal). Grout area. Output area. If Stephenson wishes to maximize its total market value, would you recommend that it issue debt or equity to finance the land purchase? Explain
