Hello!

I am stuck on only B-1 Recession EPS - I got everything else andI cannot figure out what I'm doing wrong - I keep getting $4.81,but it's incorrect and I don't know why. Can you help? I pasted mynumbers below the question.

Sunrise, Inc., has no debt outstanding and a total market valueof $240,900. Earnings before interest and taxes, EBIT, areprojected to be $40,000 if economic conditions are normal. If thereis strong expansion in the economy, then EBIT will be 14 percenthigher. If there is a recession, then EBIT will be 25 percentlower. The company is considering a $130,000 debt issue with aninterest rate of 7 percent. The proceeds will be used to repurchaseshares of stock. There are currently 7,300 shares outstanding. Thecompany has a tax rate of 23 percent, a market-to-book ratio of1.0, and the stock price remains constant.

  

a-1.	Calculate earnings per share (EPS) under each of the threeeconomic scenarios before any debt is issued.
a-2.	Calculate the percentage changes in EPS when the economyexpands or enters a recession.
b-1.	Calculate earnings per share (EPS) under each of the threeeconomic scenarios assuming the company goes through withrecapitalization.
b-2.	Given the recapitalization, calculate the percentage changes inEPS when the economy expands or enters a recession.

I know the answers outside of the recession one are correct - soI cannot determine what is wrong, can you help? Below is mywork.

B-1
Market Value per Share	32.88
Number of Shares Repurchased	3954.17
Number of Shares Outstanding after repurchase	3345.83
Interest Expense on Debt	9100
Particulars	Recession	Normal	Expansion
EBIT	30,000	40,000	45600
EBT	20,900	30,900	36500
Earnings After Tax	16093	23793	28105
Shares Outstanding After Repurchase	3345.83	3345.83	3345.83
EPS	$4.81	$7.11	$8.40

Thank you!