Winters Company has the financial information down below

Calculating the Value of a BusinessWinters Company has the financial information down below.Asset is $3,000,000 (), which means your book equity value equals your market equity valueCurrent stock price is $15, and has 150,000 number of shares outstandingHowever, the firm is considering selling bonds to increase its debt level. If it moves to a capital structure with 70% debt based on market values, to reflect the increased risk. In other words, the bondholders demand a higher return to compensate the higher leverage risk. Current rd = 6 %, new rd from the new additional bond sales = 9 %.The current beta of the company (bL) is 1.4EBIT is $260,000This company EBIT has a current constant growth of 3.5%, and payout 40% of its earnings as dividend. However, once it gets more capital from the new debt that it plans to raise, the new constant growth rate will be 8.7% because it will deploy this new capital to generate a higher growth rate for the company.Tax rate is 25%, rM = 10% and rF is 4% a) What is the current debt value? Weight of Debt in %? Hint: You know the equity value and the asset value from the given information, so you can find the debt value. b) What is the WACC before the change in capital structure? c) What is the new WACC after the change in capital structure? d) Find the intrinsic value of the firm before the change and what should be the intrinsic stock price. Why is the price per share trading in the market different from your calculated intrinsic stock price? e) Find the intrinsic value of the firm after the change and what could be the intrinsic stock price, which can translate to the market stock price. f) Should the firm go ahead with the change? How much does it affect the stock price in %?

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