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2. Eastern Markets has no debt outstanding and a total market value of $346,500. Earnings before interest and taxes, EBIT, are projected to be $14,000 if economic conditions are normal (p=0.5). If there is strong expansion (p=0.3) in the economy, then EBIT will be 13 percent higher. If there is a recession ( =0.2 ), then EBIT will be 32 percent lower. The firm is considering a debt issue of $16,000 with an interest rate of 6.8 percent. The proceeds will be used to repurchase shares of stock. There are currently 4,500 shares outstanding. Ignore taxes. a. What will be the expected EPS after the share repurchase? $2.93 b. What will be the percentage change in EPS if the economy enters a recessionary period immediately before the share repurchase? 32.95%