Fujita, Incorporated, has no debt outstanding and a total market value of $230 Earnings before interest and taxes, EBIT, are projected to be $39,000 if econ conditions are normal. If there is strong expansion in the economy, then EBIT will I percent higher. If there is a recession, then EBIT will be 24 percent lower. company is considering a $125,000 debt issue with an interest rate of 6 percent. proceeds will be used to repurchase shares of stock. There are currently 7,200 st outstanding. The company has a tax rate of 22 percent, a market-to-book ratio c before recapitalization, and the stock price changes according to M\&M. a-1. Calculate earnings per share (EPS) under each of the three economic scen before any debt is issued. (Do not round intermediate calculations and r your answers to 2 decimal places, e.g., 32.16.) a-2. Calculate the percentage changes in EPS when the economy expands or enter recession. (A negative answer should be indicated by a minus sign. Do not ro 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 recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indica. by a minus sign. Do not round intermediate calculations and enter your ansn as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Fujita, Incorporated, has no debt outstanding and a total market value of $230 Earnings before interest and taxes, EBIT, are projected to be $39,000 if econ conditions are normal. If there is strong expansion in the economy, then EBIT will I percent higher. If there is a recession, then EBIT will be 24 percent lower. company is considering a $125,000 debt issue with an interest rate of 6 percent. proceeds will be used to repurchase shares of stock. There are currently 7,200 st outstanding. The company has a tax rate of 22 percent, a market-to-book ratio c before recapitalization, and the stock price changes according to M\&M. a-1. Calculate earnings per share (EPS) under each of the three economic scen before any debt is issued. (Do not round intermediate calculations and r your answers to 2 decimal places, e.g., 32.16.) a-2. Calculate the percentage changes in EPS when the economy expands or enter recession. (A negative answer should be indicated by a minus sign. Do not ro 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 recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indica. by a minus sign. Do not round intermediate calculations and enter your ansn as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct
