Seth is the sole owner of a firm. He plans to purchase the company next door Pooh Corp. for $600,000,and he expectsthat the annual incomebefore taxfrom Pooh is $80,000.

He isconsidering two financing alternatives: The first is to get a personal loan of $300,000 (for infinite duration) andpay the remaining amount from his savings.

The second is to finance the purchase by having his firm take the $300,000 loan. The interest rate on the loan is 9% and the corporate tax rate is 40%.There is no personal tax. The lender doesn't pay corporate tax.

What will be the total amount received by Seth the share holder and the debt holder in each scenario?