Northern Wood Products is an all - equity firm with 15,900 shares of stock outstanding and a total market value of $ 353,000 . Based on its current capital structure , the firm is expected to have earnings before interest and taxes of $ 26,500 if the economy normal , $ 14,400 if the economy is in a recession , and $ 38,600 if the economy booms . Ignore taxes . Management considering issuing $ 88,300 of debt with an interest rate of 7 percent . If the firm issues the debt , the proceeds will be used to repurchase stock . What will the earnings per share be if the debt is issued and the economy is in a recession ?