Kaelea, Inc., has no debt outstanding and a total market value of $74,000. Earnings before interest and taxes, EBIT, are projected to be $8,100 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 21 percent higher. If there is a recession, then EBIT will be 34 percent lower. Kaelea is considering a $27,400 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 3,700 shares outstanding. Ignore taxes for this problem.

Requirement 1:

(a)	Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued.(Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

	EPS
Recession	$
Normal	$
Expansion	$

(b)	Calculate the percentage changes in EPS when the economy expands or enters a recession. (Do not round intermediate calculations.Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16).)

	%EPS
Recession	%
Expansion	%

Requirement 2:

Assume Kaelea goes through with recapitalization.

(a)	Calculate earnings per share, EPS, under each of the three economic scenarios after the recapitalization.(Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

EPS

Recession

$

Normal

$

Expansion

$

(b)	Calculate the percentage changes in EPS when the economy expands or enters a recession. (Negative amounts should be indicated by a minus sign.Round your answers to 2 decimal places (e.g., 32.16).)

	%EPS
Recession	%
Expansion	%

The answers I have are $1.44, $2.19, $2.65 for the first three under 1A, and 21% for expansion under 1B. I still need recession under 1B and all of requirement 2.