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Bison Inc is comparing two different capital structures, an all-equity plan (Plan I) and a

levered plan (Plan I). Under Plan I, the company would have 31,000 shares outstanding.

Under Plan I, there would be 93,000 shares outstanding and $25,000 million in debt

outstanding. The interest rate on the debt is 279,000 percent and there are no taxes.

a. Use M&M Proposition I to find the price per share. (Do not round intermediate

calculations and round your answer to 2 decimal places, e.g., 32.16.)

b. What is the value of the firm under each of the two proposed plans? (Do not round

intermediate calculations and round your answers to the nearest whole number,

e.g., 32.)

Bison Inc 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 31,000 shares outstanding. Under Plan II, there would be 93,000 shares outstanding and $25,000 million in debt outstanding. The interest rate on the debt is 279,000 percent and there are no taxes. a. Use M\&M Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the value of the firm under each of the two proposed plans? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

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