XYZ Inc., has no debt outstanding and a total market value of $150,000. Earnings before interest and taxes [EBIT] are projected to be $14,000 if economic conditions are normal. If there is a strong expansion in the economy, then EBIT will be 30% higher. If there is a recession, then EBIT will be 60% lower. XYZ is considering a $60,000 debt issue with a 5% interest rate. The proceeds will be used to repurchase shares of stock. There are currently 2,500 shares outstanding. Under a perfect capital market, answer the following:

1. Under the current capital structure, what is the ROE, ROA and EPS under a normal, strong and recession economy?