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Please provide the spreadsheet using excel As the chief financial officer (CFO) of New Horizon Corporation, you are considering a recapitalization plan that will shift

Please provide the spreadsheet using excel

As the chief financial officer (CFO) of New Horizon Corporation, you are considering a recapitalization plan that will shift New Horizons capital structure from all common stock equity to 30% debt financing. New Horizon expects to generate $13.75 million in annual net operating profit indefinitely. The current unlevered capital structure consists of 2,200,000 shares of outstanding common stock and shareholders require an 8% return on equity. Ignoring taxes, create a spreadsheet that answers the following questions.

A) Under the current capital structure, what is New Horizons firm value, EPS, stock price, and ROE?

B) How much debt will New Horizon need to issue to achieve the proposed capital structure and what will be the annual interest expense if the coupon rate for the debt is 5.4%?

C) How many shares of common stock will be outstanding under the proposed capital structure and what will be the new EPS and ROE?

D) What is New Horizons expected EPS and ROE under the current and proposed capital structure if its NOP is as likely to be $6.875 million or $20.625 million as it is $13.75 million?

E) Graph the effect financial leverage has on the New Horizons EPS sensitivity to changes in net operating profit for the current and proposed capital structures. At what level of NOP is New Horizons EPS the same for both the current and proposed capital structures?

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