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Mockingjar Inc. is currently an all-equity firm with 2,500,000 shares outstanding and a market capitalization of $37.5 million. The firm is considering borrowing $9.375 million

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Mockingjar Inc. is currently an all-equity firm with 2,500,000 shares outstanding and a market capitalization of $37.5 million. The firm is considering borrowing $9.375 million and using the funds to buy back shares in the firm. The firm currently has an EBIT of $4.5 million and expects to have the same EBIT each year going forward, although the EBIT could be 20% higher or 60% lower depending upon market conditions. Miss Everdine is a Mockingjar shareholder. She currently owns 7500 shares. There are no taxes. The cost of debt for both Mockingjar and Miss Everdine is 8% annually. What will be the firm's EPS next year if it stays as an all equity firm but it experiences the lower than average EBIT

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