Charny Inc. has no debt outstanding and a total market value of $$165,000.$ Earnings before interest and taxes, EBIT, are projected to be

$$21,000$ if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be $20\%$ higher. If there is a

recession, then EBIT will be $25\%$ lower. Charny is considering a $$60,000$ debt issue with a $7\%$ interest rate. The proceeds will be used

to repurchase shares of stock. There are currently $5,500$ shares outstanding. Charny has a tax rate of $35\%.$

a$-1.$ Calculate earnings per share $($EPS$)$ under each of the three economic scenarios before any debt is issued. $($Do not round

intermediate calculations. Omit $ sign in your response.$)$

a$-2.$ Calculate the percentage changes in EPS when the economy expands or enters a recession. $($Do not round intermediate

calculations. Negative answers should be indicated by a minus sign.$)$

b$-1.$ Calculate earnings per share $($EPS$)$ under each of the three economic scenarios assuming the company goes through with

recapitalization. $($Round the final answers to $2$ decimal places. Omit $ sign in your response.$)$

$*$Please explain with details. Thank you.