on Company MNO is considering a change to its capital structure. More specifically, the company is currently financed through 100% equity but is considering a bond issue that would be used to repurchase company stock. OPTION 1: Maintain the current capital structure. OPTION 2: Issue $3,000,000 in corporate bonds and use the proceeds to repurchase shares of stock. Assume the bonds mature in 5 years and have a coupon rate of 5%. There are currently 700,000 shares of stock outstanding. The current market price of the stock is $10. (Assume total equity equals $7,000,000.) The company does not pay an annual dividend. The applicable corporate tax rate is 21%. Assuming EBIT of $900,000, calculate the EPS for option 1 and the ROE for option 2. a. Calculate the EPS for OPTION 1. (4 points) b. Calculate the ROE for OPTION 2 (4 points)