JAZ Inc has invested capital of $7million, $2 million of debt (5% interest rate) and book equity of $5 million. There are 10 shareholders each owing 5,000 shares which are trading at $120/sh. JAZ pays dividends equal to 100% of its earnings. JAZ is going to repurchase 1,000 shares from each shareholder by issuing $1.2 million in debt with a 6% interest rate. JAZ's EBIT is $1.4 million and they have a 25% tax rate.

1. What are Jaz's dividends per share before and after the repurchase of shares? Show work.

2. In your opinion should Jaz repurchase the shares ? Explain you logic.

3. Calculate Noodles & Company 2022 debt covenant ratios. Show all work.

4. Calculate Noodles Debt Capacity. Show all work.

For Questions 3 & 4