Chapter 16 (Total points:25) Problem 1.16 Money Inc. has no debt outstanding and a total market value of 122,000. Earnings before interest and taxes, EBIT, are projected to be $11,000 if cconomic conditions are normal. If there is strong expansion in the cconomy, then EBIT will be 22 percent higher. If there is a recession, then EBIT will be 52 percent lower. Money is considering a 549,000 debt issue with an 3.00 percent interest rate. The proceeds will be used to repurchase shares of stock. There are currently 2,000 shares outstanding. Ignore taxes for this problem. a. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued. Also calculate the percentage changes in EPS when the cconomy expands or enters a recession b. Calculate camings per share, EPS, under each of the three cconomic scenarios assuming the company goes through with the recapitalization. Also calculate the percentage changes in EPS when the cconomy expands or enters a recession assuming that Money goes through with recapitalization o C Type here to search O e End do DII Home Prison FB FS A a % 5 & 7 2 8 3 6 WER T Y U