Yasmin Corporation is comparing two different capital structures, an all- equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Yasmin would have 141,000 shares of stock outstanding. Under Plan II, there would be 56,400 shares of stock outstanding and $ 1.222 million in debt outstanding. The interest rate on the debt is 10 percent and there are no taxes.
Using MM Proposition I, the price per share of equity under each of the two proposed plans is? The value of the firm is $$$ under Plan I, and $$$ under Plan II?
I am trying to calculate this but keep coming up with the wrong information…
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