Test company is debating whether or not to convert its
all-equity capital structure to one that is 35 percent debt.
Currently there are 5,000 shares outstanding and the price per
share is $49. EBIT is expected to remain at $43,600 per year
forever. The interest rate on new debt is 7 percent and there are
no taxes. a. Mr, Ram , a shareholder of the firm, owns 100 shares
of stock. What is his cash flow under the current capital...