6. Provide a sensitivity analysis of the re-capitalization at $3 B debt. Use the following three tables and assume that the numbers given are for EBIT (2001) Pre-Recapitalization (Status Quo) 2001 Worst Case Most Likely Best Case EBIT ($ Million) 214 514 814 Interest Expense Taxable Income Taxes Net Income Shares Outstanding EPSPost-Recapitalization (Share Repurchase) 2001 Worst Case Most Likely Best Case EBIT ($ Million) 214 514 $14 Debt Rating Based on EBIT Coverage *+ Yield on debt Interest Expense Taxable Income Taxes Net Income Shares Outstanding EPS PV tax Shield MV of the Firm Share price Post-Recapitalization (Dividend Payout)) 2001 Worst Case Most Likely | Best Case EBIT ($ Million) 214 514 814 Debt Rating Based on EBIT Coverage** Yield on Debt Interest Expense Taxable Income Taxes Net Income Shares Outstanding EPS PV tax Shield MV of the Firm Share price Note that in getting the debt rating, you will run into a circularity problem. That is, the debt rating depends on the interest. However, the interest depends on the yield, which in turn depends on the rating. To solve this, you can use a trial and error method. Assume a rating, get the yield, and the interest. Use the EBIT coverage to check whether it is consistent with the rating and the yield