STATEMENT The company SALAS, S.A. It is going to carry out a series of investments, the cost of which amounts to 30,000 euros, in assets associated with the production system. These investments are expected to have a positive impact on sales, although it is not possible to be sure what level they will reach. For this reason, the research and market studies area together with the company's financial department have come to the conclusion that the following scenarios may take place relative to the company as a whole: Sales and cost scenarios (SEE DATA IN SPREADSHEET) These investments can be financed according to two different plans: Financing plan A consists of borrowing 24,000 euros, at a cost of 5%; the rest of the money would be obtained through a capital increase, issuing the shares at 150%. Financing plan B consists of issuing shares at 120%, until obtaining 50% of the necessary financing; For the rest of the money, a bank loan would be used at a cost of 3%. Additional Information: The company's tax rate is 30% The number of shares issued before investment is 1,000 1. Decide which of the two detailed financing plans is more interesting for the company from an earnings per share point of view. 2. Calculate how the Liabilities + Equity will be, and its composition, after the investment, with each of the two financing plans.

LIABILITIES + CURRENT EQUITY (BEFORE THE PROPOSED INVESTMENT): SEE ANNEX I ON THE CALCULATION SHEET

STATEMENT DATA
SALES AND COSTS SCENARIOS
	Pessimistic (20%)	Probable (60%)	Optimistic (20%)
Sales	6,125	20,125	27,125
Costs	-2,625	-8,625	-11,625
Earnings before Interest and Taxes	3,5	11,5	15,5
APPENDIX I: LIABILITIES + CURRENT EQUITY (BEFORE THE PROPOSED INVESTMENT)
Own Resources 20,000
Capital Stock 10,000
Share premium 2,000
Reserves 8,000
External Resources 9,600
Long-term loan 7,500
Suppliers 2,000
Creditors 100
Total Liabilities + Equity 29,600
Number of shares issued 1,000
Long-term loan interest rate 4%
Source: Margarita Prat book and own elaboration