Ornaments, Inc., is an all-equity firm with a total market value of $718,000 and 38,300 shares of stock outstanding. Management believes the earnings before interest and taxes (EBIT) will be $103,600 if the economy is normal. If there is a recession, EBIT will be 25 percent lower, and if there is a boom, EBIT will be 35 percent higher. The tax rate is 40 percent. What is the EPS in a recession?

Multiple Choice

• $2.03

• $1.05

• $1.62

• $2.19

• $1.22