Problem 13-2 EBIT, Taxes, and Leverage [ [LO 2 ] Fujita, Incorporated, has no debt outstanding and a total market value of $222.000. Earnings before interest and taxes, EBIT, are projected to be $18,000 if economic conditions are normal. If there is strong expansion in the econamy, then EBIT will be 25 percent higher. If there is a recession, then EBIT will be 30 percent lower. The company is considering 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. The company has a tax rate of 21 percent, a market-to-book ratio of 1.0, and the stock price remains constant. a-1. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued. Note: Do not round Intermedlate calculatlons and round your answers to 2 declmal places, e.g., 32.16. a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. Note: A negatlve answer should be Indlcated by a minus slgn. Do not round intermedlate calculations and enter your answers as a percent rounded to the nearest whole number, e.g., 32. b-1. Calculate earnings per share, EPS, under each of the three economic scenarios after the recapitalization. Note: Do not round Intermedlate calculatlons and round your answers to 2 decimal pleces, e.g., 32.16. b-2. Calculate the percentage changes in EPS when the economy expands or enters a recession assuming recapitalization has occurred. Note: A negative answer should be Indlcated by a minus slgn. Do not round Intermedlate calculations and enter your answers as o percent rounded to 2 decimal places, e.g., 32.18