You have recently been hired as a financial analyst for a children's toy manufacturing company. The company is growing a

[answerhappygod]

You have recently been hired as a financial analyst for a
children's toy manufacturing company. The company is growing and
has capital to invest in expansion projects. Currently, your
business is financed exclusively with equity – there is no debt.
The shareholders have however decided to consider the issue of debt
which would be used to buy back common shares, which will modify
the capital structure of the company and introduce a financial
leverage effect.
The current financial structure is as follows: the assets of the
company have a market value of $12 million. There are currently
400,000 shares outstanding and the stock price is $30 - there is no
debt.
Suppose that the company decides not to change the financial
structure and that one of the shareholders asks you how he should
do to still benefit from financial leverage identical to the
proposed structure (by using artisanal leverage). This shareholder
currently holds 3,000 shares.
a) What would you recommend to this shareholder to reproduce the
desired financial leverage if we assume that this shareholder can
borrow funds at the rate of 6%.
b) Support your recommendation by demonstrating with a table what
the net profit that the shareholder would receive would be under
each of the three EBIT scenarios.
c) Demonstrate using a table including the three scenarios that
the net profit calculated in b) would be identical to that which
would have been obtained if the company had carried out the capital
restructuring as it would have wished departure.