Consider a firm with an EBITDA of $$14,400,000$ and an EBIT of $$11,200,000.$ The firm finances its assets with $$51,400,000$ debt $($costing $7\mathrm{.}2$ percent all of which is tax deductible$)$ and $10,700,000$ shares of stock selling at $$6\mathrm{.}00$ per share. The firm is considering increasing its debt by $$25,800,000,$ using the proceeds to buy back shares of stock. The firm$$s tax rate is $21$ percent. The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $$11,200,000.$

Calculate the EPS before and after the change in capital structure and indicate changes in EPS.

EPS Before:

EPS After:

Change in EPS: