Question: I need full explanation all details Example A firm has a total market value of $ 175000 , no debt, and 20,000 shares outstanding .

I need full explanation all details

Example A firm has a total market value of $ 175000 , no debt, and 20,000 shares outstanding . In a normal economy , the EBIT is $30,000 . The EBIT will be 30% higher and 40% lower in an expansion and recession respectively. The firm is considering a recapitalization by issuing $71750 worth of debt that has 6% interest, and using it to repurchase shares

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