Susan is the CFO of Susan's Retail Beer Shops. She is considering a capex expansion of $5.0 million dollars. She is getting conflicting advice from her financial advisors on how to finance the expansion. Patrick is recommending an expansion financed only through debt and Jerome suggests a combination of equal parts of debt and common equity. The current P/E ratio on the company's stock is 11 and eps are $3.00. If the expansion goes through, sales will increase by $15.0 million and pretax profits are estimated at 20% of sales. If the expansion is only financed with equity (option 1), investors believe that the P/E ratio will expand to 13. If both debt and equity are used to finance the expansion option 2), the P/E ratio will be 16. Under both scenarios the tax rate is 40%. Currently the company has 1,000,000 shares outstanding and the pretax-cost of debt is 10%. a) Show all your work clearly for both options to show what the expected share prices will be under both options and recommend whether to do nothing or which option to select. Show all calculations. b) What is the percent return on common shares to shareholders of both options? Show all calculations