World Care Inc is debating whether to set up with an all-equity capital structure or one that is 60% debt. Under all equity the firm will have 12,000 shares outstanding and the price of share will be $2.50. The cost of debt is 9% and there are no taxes. The firm expects the EBIT will be $3,000 pa. Founding Director Mr Ward intends to have 2000 shares. a. What will be Mr Ward's cash flow under all equity capital structure? b. What will be Mr Ward's cash flow with debt in capital structure? c. Explain why the capital structure World Care Inc uses is irrelevant.