Renegade Clothing is struggling to meet analysts' forecasts. It's early December $2024,$ and the year$-$end projections are in$.$ Listed below are the projections for the year ended $2024$ and the comparable actual amounts for $2023.$

Projected

$2024$ Actual

$2023$

Sales $ $14,010,000$ $ $16,110,000$

Net income $866,0001,110,000$

Total assets $ $6,510,000$ $ $7,270,000$

Total liabilities $ $2,080,000$ $ $2,510,000$

Stockholders' equity $4,430,0004,760,000$

Total liabilities and stockholders' equity $ $6,510,000$ $ $7,270,000$

Shares outstanding at year$-$end $967,000967,000$

Analysts forecast earnings per share for $2024$ to be $$0\mathrm{.}93$ per share. It looks like earnings per share will fall short of expectations in $2024.$

Ronald Outlaw, the director of marketing, has a creative idea to improve earnings per share and the return on equity. He proposes the company borrow additional funds and use the proceeds to purchase some of its own stock$$treasury shares. Is this a good idea?

Required:

$1.$ Calculate the projected earnings per share and return on equity for $2024$ before any purchase of stock.

Now assume Renegade Clothing borrows $$1\mathrm{.}89$ million and uses the money to purchase $189,000$ shares of its own stock at $$10$ per share. The projections for $2024$ will change as follows: