Mr. Marcelo has a burgeoning stock brokerage firm and he wants to expand his operations and compete in the global stock brokerage industry. Mr. Marcelo has an external funding requirement amounting to P50,000,000.00 for the said expansion. He is contemplating on whether to use debt financing or equity financing for him to generate the abovementioned external funding requirement. After the expansion, he expects that his operating expenses and cost of service will remain constant at 50% of the company's revenue. His options in generating the P50,000,000 are as follows: 1. Sell 2,000,000 new shares of common stock at a net price of P25 per share; or 2. Sell P50,000,000, premium bond at an interest of 10%. The maturity would be 30 years, and the bond is predetermined as callable. Additional Information: a) In a bust economy, Mr. Marcelo can earn a gross revenue of P18,000,000.00 and in a boom economy, he can earn a gross revenue of P30,000,000.00 b) Mr. Marcelo's stock brokerage firm has no outstanding debts. c) Mr. Marcelo pays P1,500,000 annually for the dividends of his preferred shareholders. d) Tax rate is at 40% e) If debt financing will be used, total interest expense is P 4,000.000 and if equity financing will be used. total interest expense is P1.500.000. f) Mr. Marcelo's stock brokerage firm currently has a total of 4,000,000 outstanding common shares. २EQUIRED: 1. What is the EPS for bonds during bust economy? 2. What is the EPS for stocks during bust economy? 3. What is the EPS for bonds during boom economy? 4. What is the EPS for stocks during boom economy? 5. What is the slope of the line for bonds? 6. What is the slope of the line for stocks? 7. What is the equation for bonds? 8. What is the equation for stocks? 9. What is the crossover point? 10. What type of financing should be used? a. debt financing b. equity financing?