Estimate the change in a firms EPS when it issues $1.5 million at a rate of 10% debt and the proceeds are used to repurchase half of the shares outstanding. Prior to issue of additional debt, the firm reported operating income worth $2 million, EPS of $2.5 and debt equal to $1 million (at a rate of 10%). (Ignore taxes) 1) EPS increase to $3.61

2)EPS increase to $4.11

3)EPS increase to $4.61

4)EPS increase to $3.11