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Fujita, Incorporated, has no debt outstanding and a total market value of $284,900. Eamings before interest and taxes. EBIT, are projected to be $44,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 18 percent higher. If there is a recession, then EBIT will be 29 percent lower. The company is considering a $150,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 7,700 shares outstanding. The company has a tax rate of 22 percent, a market-to-book ratio of 1.0 , and the stock price remains constant. a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round Intermedlate calculations and round your answers to 2 declmal places, e.9., 32.16.) a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negatlve onswer should be Indlceted by a minus sign. Do not round Intermedlate calculatlons and enter your answers as a percent rounded to 2 declmal ploces, e.g., 32.16.) . b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization. (Do not round Intermedlate calculatlons and round your answers to 2 declmal places, e.g., 32.16.) b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (A negatlve answer should be lndlcated by a minus sign. Do not round Intermedlate calculatlons and enter your answers as a percent rounded to 2 declmal places, e.g., 32.16.)

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