River Cruises is all$-$equity$-$financed.

Current Data

Number of shares $100,000$

Price per share $ $10$

Market value of shares $ $1,000,000$

Outcomes

State of the Economy

Slump Normal Boom

Profits before interest $ $75,000$ $ $125,000$ $ $175,000$

Suppose it now issues $$250,000$ of debt at an interest rate of $10\%$ and uses the proceeds to repurchase $25,000$ shares. Assume that the firm pays no taxes and that debt finance has no impact on firm value. Refer to the above table to compute the missing data.

Note: Do not round intermediate calculations. Round "Earnings per share" to $3$ decimal places. Enter "Return on shares" as a percent rounded to $2$ decimal places.