10 points 1 Skipped Charny Inc. has no debt outstanding and a total market value of $150,000. Earnings before interest and taxes, EBIT, are projected to be $32.000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 10% higher. If there is a recession, then EBIT will be 30% lower Charmy is considering a $75,000 debt issue with an interest rate of 6%. The proceeds will be used to repurchase shares of stock. There are currently 10,000 shares outstanding Ignore taxes for questions a and b. Assume the company has a market-to-book ratio of 1.0. a-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is issued. (Enter your answer as a percentage rounded to 2 decimal places.) ROE eBook Print References Recession Normal Expansion 8-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. (Do not round intermediate calculations. Negative answers should be indicated by a minus sign. Enter the answers as a percent rounded to the nearest whole number.) Schange In ROE Recession Expansion Assume the firm goes through with the proposed recapitalization.