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Company Carriots has no debt outstanding and a total market value of 245000. If economic conditions are normal the projected EBIT is 19000, if there

Company Carriots has no debt outstanding and a total market value of 245000.

If economic conditions are normal the projected EBIT is 19000, if there is expansion the EBIT will be 25% higher, if there is recession EBIT will be 40% lower.

The company is considering a 58800 debt issue with an interest of 8%.

The proceeds will be used to repurchase stock. There are 5000 shares outstanding, and no taxes. Assume stock price is constant in all scenarios.

Calculate EPS in all scenarios.

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