Show step by step working please AllStar Production Corporation (APC) is considering a recapitalisation plan that would convert APC from its current allequity capital structure to one including substantial financial leverage. APC now has 10,000,000 ordinary shares outstanding, which are selling for $7.00 each. Expected EBIT of APC is $7,000,000 per year for the foreseeable future. The recapitalisation proposal is to issue $49,000,000 worth of longterm debt at an interest rate of 5.0 per cent and use the proceeds to repurchase as many shares as possible at $7 per share. Assume there are no market frictions such as corporate or personal income taxes. a. Calculate the number of shares outstanding, total value of equity and the debttoequity ratio for APC if the proposed recapitalisation is adopted. b. Calculate the expected return on equity for APC shareholders under the current allequity capital structure and under the recapitalization plan. c. Calculate the expected earnings per share (EPS) and return on equity for APC shareholders under the current allequity capitalisation and the proposed mixed debt/equity capital structure. d. At what level of EBIT will APC shareholders earn zero EPS under the current and the proposed capital structures?