Pagemaster Enterprises is considering a change from its current capital structure. The company currently has an...

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Pagemaster Enterprises is considering a change from its currentcapital structure. The company currently has an all-equity capitalstructure and is considering a capital structure with 40 percentdebt. There are currently 2,500 shares outstanding at a price pershare of $80. EBIT is expected to remain constant at $23,990. Theinterest rate on new debt is 10 percent and there are no taxes.
a.
Rebecca owns $20,000 worth of stock in the company. If the firmhas a 100 percent payout, what is her cash flow? (Do notround intermediate calculations and round your answer to 2 decimalplaces, 32.16.)
b. What would her cash flow be under the new capital structureassuming that she keeps all of her shares? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, 32.16.)
c. Suppose the company does convert to the new capital structure.Show how Rebecca can maintain her current cash flow. (Donot round intermediate calculations and round your answer to 2decimal places, 32.16.)

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Pagemaster Enterprises is considering a change from its currentcapital structure. The company currently has an all-equity capitalstructure and is considering a capital structure with 40 percentdebt. There are currently 2,500 shares outstanding at a price pershare of $80. EBIT is expected to remain constant at $23,990. Theinterest rate on new debt is 10 percent and there are no taxes.a.Rebecca owns $20,000 worth of stock in the company. If the firmhas a 100 percent payout, what is her cash flow? (Do notround intermediate calculations and round your answer to 2 decimalplaces, 32.16.)b.What would her cash flow be under the new capital structureassuming that she keeps all of her shares? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, 32.16.)c.Suppose the company does convert to the new capital structure.Show how Rebecca can maintain her current cash flow. (Donot round intermediate calculations and round your answer to 2decimal places, 32.16.)

a.	Rebecca owns $20,000 worth of stock in the company. If the firmhas a 100 percent payout, what is her cash flow? (Do notround intermediate calculations and round your answer to 2 decimalplaces, 32.16.)
b.	What would her cash flow be under the new capital structureassuming that she keeps all of her shares? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, 32.16.)
c.	Suppose the company does convert to the new capital structure.Show how Rebecca can maintain her current cash flow. (Donot round intermediate calculations and round your answer to 2decimal places, 32.16.)