Please answer c-3 given a 21% tax rate.

Ghost, Inc., has no debt outstanding and a total market value of $220,100. Earnings before interest and taxes, EBIT, are projected to be $38,000 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 23 percent lower. The company is considering a $120,000 debt issue with an interest rate of 5 percent. The proceeds will be used to repurchase shares of stock. There are currently 7,100 shares outstanding. Ignore taxes for questions a and b. Assume the company has a market-to-book ratio of 1.0 and the stock price remains constant. a-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. Assume the firm goes through with the proposed recapitalization. Calculate the return on equity (ROE) under each of the three economic scenarios. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b-2. Assume the firm goes through with the proposed recapitalization. Calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete and correct. a-1 Recession ROE 13.29 % Normal ROE 17.26 Expansion ROE Recession percentage change in 19.34 % -22.93 a-2. ROE Expansion percentage change in ROE 12.06 % b-1 Recession ROE 23.24 Normal ROE 31.97 Expansion ROE 36.52 Recession percentage change in ROE b-2 -27.33 Expansion percentage change in ROE 14.18 Assume the firm has a tax rate of 21 percent. c-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-3. Calculate the return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-4. Given the recapitalization, calculate the percentage changes in ROE when the economy expands by a minus sign. Do not round intermediate calculatio as a percent rounded to 2 decimal places, e.g., 32.16.) or enters a recession. (A negative answer should be indicated and enter your answers Answer is complete but not entirely correct. c-1. Recession ROE 10.50 Normal ROE 13.64 % Expansion ROE 15.28 Recession percentage change in ROE c-2 % -22.93 Expansion percentage change in 12.06 ROE c-3 24.50 Recession ROE % 33.71(% Normal ROE 38.51 (X Expansion ROE Recession percentage change in ROE c-4 -27.33 Expansion percentage change in ROE 14.18