Problem $2-5$ Income Statement $($LG$2-1)$

Consider a firm with an EBIT of $$862,000.$ The firm finances its assets with $$2,620,000$ debt $($costing $7\mathrm{.}6$ percent and is all tax deductible$)$ and $520,000$ shares of stock selling at $$6\mathrm{.}00$ per share. To reduce the firm's risk associated with this financial leverage, the firm is considering reducing its debt by $$1,000,000$ by selling an additional $320,000$ shares of stock. The firm's tax rate is $21$ percent.

The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $$862,000.$

Calculate the change in the firm's EPS from this change in capital structure. $($Do not round intermediate calculations and round your final answers to $2$ decimal places.$)$

Answer is complete but not entirely correct.

$\backslash$table$[[,,],[$EPS before,$$,1\mathrm{.}01],[$EPS after,$$,0\mathrm{.}69],[$Difference$,$$$,0\mathrm{.}32ox$