1 Problem 16-3 Leverage and Earnings (L01) 11.11 points River Cruises is all-equity-financed. Number of shaces Price per share Market value of shares Current Data 190,000 $ 10 $1,000,000 Outcomes State of the Economy Slump Normal Boom $ 81,250 $137.500 $ 199,000 eBook Profits before interest Print References 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. (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.) Data Number of shares $ 102 Price per share Market value of shares Market value of debt Outcomes State of the Economy Slump Normal 81,250 $ 137,500 Boom 199,000 Profits before interest $ $ Interest Equity earnings Earnings per share Return on shares % % % Expected Outcome