Lennon & McCartney Co is comparing two different capital structures: An all equity plan (Plan 1) and a levered plan (Plan 2). Under Plan 1, the company would have 200,000 shares of stock outstanding. Under Plan 2, there would be 130,000 shares of stock outstanding and $2.925 million in debt outstanding. The interest rate on the debt is 8%, and there are no taxes. What is the current share price? O a. $38.50 O b. $41.8 O c. $53.89 O d. $27.5 QUESTION 9 Using the information in (8), what is the ratio of the value of the firms comparing Plan 1 to Plan 2? O a. 1

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