Fujita, Inc., 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.

a$.$ Calculate earnings per share $($EPS$)$ under each of the three economic scenarios before any debt is issued. Also calculate the percentage changes in EPS when the economy expands or enters a recession.

b$.$ Repeat part $($a$)$ assuming that the company goes through with recapitalization.

Input Area:

$\backslash$table$[[$Market value,$$222,000$