Question 6: Capital Structure (20 marks) Optimal capital structure Cosmetic Manufacturers is contemplating changing the capital structure of the firm. The firm has $45,000,000 in total acts, camings he fore interest and taxes of $5,500,000, and is saxed at a rate of 40% a. Complete the following table showing the values of debe, equity, and the tal number of shares of common stock. The book value is $20 per share. Dide 5: Equity (5) Nano 530 $45,000,000 10 45,000,000 20 45,000,000 45,000,000 45,000,000 45,000,000 b. Complete the following table indicating the total debe and interest expense for each level of indebtedness. %Dade 155 Using an EBIT of $7,500,000, a 40% tax rate, and the information developed in parts a and b, calculate the most likely earnings per share (EPS) for the firm at each level of indebtedness SD Taxes Neti $7,300,000 1, 20 000 d. Complete the following table showing the estimates of the value per sha various level of indebudness. The extins of required stars are denoted by r., 175 B.IS 124% Bower in the previous parts, which dehe ratio would yin muom mend? Explain your ar