question 10

Ornaments, Incorporated, is an all-equity firm with a total market value of $553,000 and 21,800 shares of stock outstanding. Management believes the earnings before interest and taxes (EBIT) will be $78,100 if the economy is normal. If there is a recession, EBIT will be 25 percent lower, and if there is a boom, EBIT will be 35 percent higher. The tax rate is 24 percent. What is the EPS in a recession? Multiple Choice $2.69 $2.04 $2.15 $2:69 $2.04 $2.15 $2.90 $1.40