Iman Paradise is an all equity firm that has 5,000 shares of stock outstanding at a market price of RM15 a share. The firm's management has decided to issue RM30,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 10 percent.

i. What are the earnings per share at the break-even level of earnings before interest and taxes? Ignore taxes.

ii. Analyse the outcome in (i) with a diagram