North Side has no debt and a market value of $175,000. EBIT projects to be $16,000 under normal economic conditions. In a strong economic expansion, EBIT will be 30% higher. The company is considering a $70,000 debt issue with a 7% interest rate to repurchase stock. There are currently 2,500 shares outstanding, and the tax rate is 34%. What will the percentage change in EPS be if the economy has a strong expansion?

** no excel please! please show all work - thank you!

A) 43.24 percent

B) 38.80 percent

C) 53.92 percent

D) 41.26 percent

E) 50.45 percent