8. Dr. Roy Thomson own the row Can Fix It The Tali Fimes and Sporthat has the capital structure shown below. De Thomson doesn't like debt and so he has never borrowed to finance the computy. The term for not having debt is "Unlevered". There are 10,000 shares of stock outstanding Sean O'Connell, an LFC-educated investment banker, comes along and says that they could increase the value of the firm by simply changing the capital structure. The investment banker's proposal is to issue enough debt to burn back hallo the outstanding. He says that the interest expense of the debt is tax deductible crosting something called a "tax shield" which reduces their taxes and increases firm value Dr. Thomson hires you, being a fine, upstanding financial analyst, to help him with this decision. The common Borrow at 5% interest. Please complete each of the empty cells in the financial statement and question below: a. (12 points 1 pt per box) Unlevered Levered Debt 0.0094 Equity 100.00% Debt value s. Equity Value S100.000 # Shares outstanding 10,000 EBIT $25,000 Interest Expense Pre-tax Income $25,000 Taxes @ 359 (58,750) Net Income $16,250 EPS (Earnings per share) $1.63 ROE (Return on Equity) 16.25% b. Based on the analysis above, would you recommend that Dr. Thomson restructures the firm? Why or why not? (4 points)