Summers, Incorporated, is an unlevered firm with expected annual earnings before taxes

of $$26\mathrm{.}1$ million in perpetuity. The current required return on the firm's equity is $14$

percent and the firm distributes all of its earnings as dividends at the end of each year.

The company has $1\mathrm{.}98$ million shares of common stock outstanding and is subject to a

corporate tax rate of $24$ percent. The firm is planning a recapitalization under which it will

issue $$36\mathrm{.}2$ million of perpetual $5\mathrm{.}9$ percent debt and use the proceeds to buy back

shares.

a$-1.$ Calculate the value of the company before the recapitalization plan is announced.

$($Do not round intermediate calculations and enter your answer in dollars, not

millions of dollars, rounded to the nearest whole number, e$.$g$.,1,234,567.)$

a$-2.$ What is the price per share? $($Do not round intermediate calculations and round

your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$-1.$ Use the APV method to calculate the company value after the recapitalization plan

is announced. $($Do not round intermediate calculations and enter your answer in

dollars, not millions of dollars, rounded to the nearest whole number, e$.$g$.,$

$1,234,567.)$

$b-2.$ What is the price per share after the recapitalization is announced? $($Do not round

intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

c$-1.$ How many shares will be repurchased? $($Do not round intermediate calculations

and enter your answer in dollars, not millions of dollars, rounded to the nearest

whole number, e$.$g$.,1,234,567.)$

$c-2.$ What is the price per share after the recapitalization and repurchase? $($Do not round

intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

d$.$ Use the flow to equity method to calculate the value of the company's equity after

the recapitalization. $($Do not round intermediate calculations and enter your

answer in dollars, not millions of dollars, rounded to the nearest whole number,

e$.$g$.,1,234,567.$

Please solve using excel showing formulas