I am needing help with a capital structure problem, EBIT, NI, EPS, and %change. I can answer the problem when ignoring the taxes but when it comes to doing it with the taxes my answer is coming up wrong.

Beckett, Inc., has no debt outstanding and a total market value of $240,000. Earnings before interest and taxes, EBIT, are projected to be $28,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 12 percent higher. If there is a recession, then EBIT will be 25 percent lower. Beckett is considering a debt issue of $140,000 with an interest rate of 6 percent. The proceeds will be used to repurchase shares of stock. There are currently 12,000 shares outstanding. The company has a tax rate 35 percent. a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).) EPS Recession $ Normal $ Expansion $ a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers as a percent.) Percentage changes in EPS Recession % Expansion % b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization. (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).) EPS Recession $ Normal $ Expansion $ b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) Percentage changes in EPS Recession % Expansion % Beckett, Inc., has no debt outstanding and a total market value of $240,000. Earnings before interest and taxes, EBIT, are projected to be $28,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 12 percent higher. If there is a recession, then EBIT will be 25 percent lower. Beckett is considering a debt issue of $140,000 with an interest rate of 6 percent. The proceeds will be used to repurchase shares of stock. There are currently 12,000 shares outstanding. The company has a tax rate 35 percent. a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).) EPS Recession $ = $28000*(1.0.25)*(1-0.35)/12000 =$1.14 per share Normal $ = $28000*(1-0.35)/12000 =$1.52 per share Expansion $ = $28000*(1.12)*(1-0.35)/12000 = $1.70 per share a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers as a percent.) Percentage changes in EPS Recession % = ($1.14 - $1.52)/$1.52$ = - 25% Expansion % = (($1.70 - $1.52)/$1.52$ = 12% b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization. (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).) If the market value of the firm is $240,000 with 12000 shares outstanding, then the value of one share of stock is: $240,000/12,000 = $20/share. If $140,000 worth of debt is raised to retire stock, then you will be buying back $140,000/$20 or 7,000 shares. So, after recapitalization there will be 12000 -7000 or 5000 shares outstanding. EBIT will be reduced by the amount of the interest on $140,000 in debt or $140,000 x .06 = $8400. EPS Recession $ =( 21000 - 8400)*(1-0.35)/5000 = $1.64 Normal $ = (28000 - 8400)*(1-0.35)/5000 = $2.55 Expansion $ = $2.98 b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) Percentage changes in EPS Recession % = ($1.64 - $2.55)/$2.55 = - 35.64% Expansion % = ($2.98 - $2.55)/$2.55 = 16.95%