Fujita, Incorporated, has no debt outstanding and a total market value of $436,100. Earnings before interest and taxes, EBIT, are projected to be $56,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 15 percent higher. If there is a recession, then EBIT will be 20 percent lower. The company is considering a $210,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 8,900 shares outstanding. Ignore taxes for questions (a) and (b). Assume the company has a market-to-book ratio of 1.0 and the stock price remains constant. a-1. Calculate return on equity, ROE, under each of the three economic scenarios before any debt is issued. Note: Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. Note: 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. Assume the firm goes through with the proposed recapitalization. Calculate the return on equity, ROE, under each of the three economic scenarios. Note: Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b-2. Assume the firm goes through with the proposed recapitalization. Calculate the percentage changes in ROE when the economy expands or enters a recession. Note: 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. 8-1. Recession ROE Normal ROE Expansion ROE 8-2. Recession percentage change in ROE 10.27% 12.84 % 14.77% -20.00% Expansion percentage change in ROE 15.00 % b-1. Recession ROE 13.31 % Normal ROE 18.27 % Expansion ROE b-2. Recession percentage change in ROE 21.98 % -27.12% Expansion percentage change in ROE 20.34 % Assume the firm has a tax rate of 24 percent. c-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is issued. Note: Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c-2 Calculate the percentage changes in ROE when the economy expands or enters a recession. Note: 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. c-3. Calculate the return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization. Note: Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c-4. Given the recapitalization, calculate the percentage changes in ROE when the economy expands or enters a recession. Note: 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. C-1. Recession ROE Normal ROE Expansion ROE c-2. Recession percentage change in ROE Expansion percentage change in ROE C-3. Recession ROE Normal ROE Expansion ROE C-4. Recession percentage change in ROE Expansion percentage change in ROE % % % % % % % % % %