finance

Fujita, Incorporated, has no debt outstanding and a total market value of $222,000. Earnings before interest and taxes. EBIT, are projected to be $18,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 25 percent higher. If there is a recession, then EBIT will be 30 percent lower. The company is considering a $60,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 7,400 shares outstanding Ignore taxes for this problem 2-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. Given the recipitalization calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be Indicated by a minus slgn. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-1. Recession EPS