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River Cruises is all-equity-financed. Current Data Number of shares 100,000 Price per share $ 10 Market value of shares $1,000,000 State of the Economy Slump

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River Cruises is all-equity-financed. Current Data Number of shares 100,000 Price per share $ 10 Market value of shares $1,000,000 State of the Economy Slump Normal Boom Profits before interest 5 78,250 131,500 193,000 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 rm value. Refer to the above table to compute the missing data. (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.) Outcomes 75,000 $ 750,000 $ 250,000 Number of shares Price per share Market value of shares Market value of debt State of the Economy Normal 131, 500 _I_I_ _I__I Expected Outcome Prots before interest Interest Equity earnings Earnings per share Return on shares

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