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Problem 3.- (20 points) Company Bigchart has no debt outstanding and a total market value of 350,000. If economic conditions are normal the projected EBIT

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Problem 3.- (20 points) Company Bigchart has no debt outstanding and a total market value of 350,000. If economic conditions are normal the projected EBIT is 20,000, if there is expansion the EBIT will be 25% higher, if t EBIT will be 40% lower. The company is considering a 50,000 debt issue with an interest of 7%. The proceeds will be used to repurchase stock. There are 7,000 shares outstanding, and no taxes. Assume stock price scenarios. Calculate EPS in all scenarios

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