Consider a firm with an EBITDA of $13,200,000 and an EBIT of $10,600,000. The firm finances its assets with $50,200,000 debt (costing 6.6% all of which is tax deductible) and 10,100,000 shares of stock selling at $10.00 per share. The firm is considering increasing its debt by $25,100,000, using the proceeds to buy back shares of stock. The firms tax rate is 21 %.

The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $10,600,000. Calculate the EPS before and after the change in capital structure and indicate changes in EPS.