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Please include excel formulas Fujita, Inc., has no debt autstanding and a tatal market value of $222,000. Earnings before interest and taxes, EBIT, are projected
Please include excel formulas
Fujita, Inc., has no debt autstanding and a tatal market value of $222,000. Earnings before interest and taxes, EBIT, are projected to be $18,000 if econamic canditions are narmal. If there is strong exparsion in the ecanomy, then EBIT will be 25 percent higher. If there is a recessian, then EBIT will be 30 percent lower. The company is cansidering a $60,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 7,400 shares outstanding- Ignore taxes for this problern. a. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. Alsa calculate the percentage changes in EPS when the ecanomy expands or enters a recession. b. Repeat part (a) assuming that the company goes through with recapitalization. input Area: \begin{tabular}{|lr|} \hline Market value & $222,000 \\ Eart & $18,000 \\ Exparsion EBIT & 25% \\ Recession EBIT & 30% \\ Debt issue & $60,000 \\ Interest rate & 7% \\ Shares dutstanding & 7,400 \\ \hline \end{tabular} (Use cells A.6 to B12 from the given information to complete this question.) Output AreaStep by Step Solution
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