As before, your firm is currently all$-$equity financed. It has $10,000$ shares of equity outstanding, selling at $$100$ a share. The firm is considering a capital restructuring. The low$-$debt plan calls for a debt issue of $$200,000$ with the proceeds used to buy back stock. The high$-$debt plan would exchange $$400,000$ of debt for equity. The debt will pay an interest rate of $10\%.$ The firm pays no taxes.

You have learned that earnings before interest and tax $($EBIT$)$ will be either $$90,000($low$)$ or $$130,000($high$).$ Assume that each case is equally likely.

What are the expected earnings per share $($EPS$)$ under the high$-$debt plan?