166 points 1 flook Print Fujita, Incorporated, has no debt outstanding and a total market value of $240.000 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 15 percent higher. If there is a recession, then EBIT will be 30 percent lower The company is considering a $80,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 15,000 shares outstanding Ignore taxes for this problem. a-1. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued Note: Do not round intermediate calculations and round your answers to 2 decimal places, eg, 32.16. a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as percent rounded to 2 decimal places, e.g., 32.16. b-1. Calculate earnings per share, EPS, under each of the three economic scenarios assuming the company goes through with recapitalization Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g.. 32.16. b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-1. Recession EPS $ 294 Normal EPS $ 4.20 Expansion EPS $ 5.04 a-2. Recession percentage change in EPS 30.00% Expansion percentage change in EPS 15 00 % b-1. Recession EPS S 1.68 Normal EPS $ 264 Expansion EPS S 3.12 Denu Next >