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Problem 4.- (20 points) Company Carriots has no debt outstanding and a total market value of 245000. If economic conditions are normal the projected EBIT

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Problem 4.- (20 points) Company Carriots has no debt outstanding and a total market value of 245000. If economic conditions are normal the projected EBIT is 19000, if there is expansion the EBIT will be 25% higher, if there is recession EBIT will be 40% lower. The company is considering a 58800 debt issue with an interest of 8%. The proceeds will be used to repurchase stock. There are 5000 shares outstanding, and no taxes. Assume stock price is constant in all scenarios. Calculate EPS in all scenarios

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