Hale Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 180,000 shares of stock outstanding. Under Plan II, there would be 130,000 shares of stock outstanding and $2.27 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. Use MM Proposition I to find the price per share. What is the value of the firm under each of the two proposed plans? a) all equity plan b) levered plan
