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Fujita, Incorporated, has no debt outstanding and a total market value of $382,500. Eamings before interest and taxes, E8iT, are projected to be $52,000 if

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Fujita, Incorporated, has no debt outstanding and a total market value of $382,500. Eamings before interest and taxes, E8iT, are projected to be $52,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 14 percent higher. If there is a recession, then EBIT will be 23 percent lower. The company is considering a $190,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 8,500 shares outstanding. The company has a tax rate of 2.5 percent, a market-to-book ratio of 1.0, and the stock price remains constant. a-1. Calculate eatnings per share, EPS, under each of the three economic scenarios before any debt is issued. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.9. 32.16. a-2. Caiculate the percentage changes in EPS when the economy expands or enters a recession. Note: A negative answer should be indicated by a minus sign. Do not round intermedlate calculations and enter your answers as a percent rounded to 2 decimal places, e.9, 32.16. b-1. Calculate eamings per share, EPS, under each of the three economic scenarios assuming the company goes through with recapitalization. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.9. 32.16. b.2. Given the recapitalization, calculate the percentage changes in EPS 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.9., 32.16

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