You own 50 shares of an unlevered company that has 1500 shares outstanding. The current stock price is $100 per a share. The companys EBIT is $55 000. The company is considering switching to a 30% debt capital structure. If issued, the r_d = 5%. Ignore taxes.

If the company chooses to remain unlevered, how can you use homemade leverage to replicate the 30% debt payoffs?

EPS_U = $

EPS_L = $

Current Personal Equity = $

Personal Debt = $

# of additional shares purchased = shares

Cash Flow you receive from the Unlevered firm = $

Cash Flow you pay for the loan = $