the market-value capital structure of zimmer room service, a hotel restautany chain is as follows: long term debt(10% Coupon) $400,000,000 common stock (10 million shares) 600,000,000 _____________ $1000,000,000

zimmer is considering as offer to contract for providing food services for jefferson hotels. Such a venture will require a capital expenditure of $24 million; zimmer is trying to decide between raisin the money by issueing new common stock or new bonds. (New bonds will have a 12% coupon) zommer's marginal tax rate is 25%

(a)how many new share must be issued as $60 each to raise enough money for the expansion? (b) what will EPS be if zimmer raises the money by issuing new shares and NOI is $100 million? if NOI is $120 Million? (c)what would be zimmer's interest payment for the new bonds? what would be total interest payments if the new capital expenditure is financed by 12% coupon debt? (d)what will EPS be if zimmer raises the money by issuing new bonds and NOI is $100 million? if NOI is $120million? (e)At what level of NOI will EPS be the same for the equity financing and the debt financing?