16-2 EBIT, Taxes, and Leverage [LO2] Fujita, Incorporated, has no debt outstanding and a total market value of $262,500. Earnings before interest and taxes, EBIT, are projected to be $42,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 16 percent higher. If there is a recession, then EBIT will be 27 percent lower. The company is considering a $140,000 debt issue with an interest rate of 5 percent. The proceeds will be used to repurchase shares of stock. There are currently 7,500 shares outstanding. The company has a tax rate of 25 percent, a market-to-book ratio of 1.0 , and the stock price remains constant. a-1. Calculate earnings per share