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Southern Wind is an all - equity firm with 2 2 , 1 0 0 shares of stock outstanding and a total market value of

Southern Wind is an all-equity firm with 22,100 shares of stock outstanding and a total market value of $365,000. Based on its current capital structure, the firm is expected to have earnings before interest and taxes of $32,500 if the economy is normal, $19,200 if the economy is in a recession, and $45,800 if the economy booms. Ignore taxes, Management is considering issuing $91,900 of debt with an interest rate of 7 percent. If the firm issues the debt, the proceeds will be

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