Date Wireless has the following assets:

Current assets: Temporary$1,190,000Permanent1,380,000Capital assets7,950,000Total assets$10,520,000

Its operating profit (EBIT) is expected to be $2.9 million. Its tax rate is 30 percent. Shares are valued at $20. Capital structure is either short-term financing at 5 percent or equity. There is no long-term debt.(Round the final answers to 2 decimal places.)

a.Calculate expected earnings per share (EPS) if the firm is perfectly hedged.

EPS$

b.Calculate expected EPS if it has a capital structure of 30% debt.

EPS$

c.Recalculate a and b if short-term rates go to 12 percent.

EPSHedged$Capital structure