Provide full calculations and explanations for all questions. Please do not use excel to answer.

Chapter 10 Q1] You are the CED of Toyota Motor Corporation. The rm has no debt outstanding. Total market value of the rm is $2,000,000. Earnings before interest and taxes, EBFT, are projected to be $244,000 if economic conditions are normal. It there is strong expansion in the economy, then EBIT will be 20% higher. If there is a recession, then EBIT will be 30% tower. Club 15 Corporation is considering a $050,000 debt issue with a 5% interest rate. The proceeds will be used to repurchase shares of stock. There are currently 15,000 shares outstanding. The tax rate is 35%. Based on the given information, please answer questions land b. {10 Points} a} Calculate eamings per share {EPS} under each of the three economic scenan'os before any debt is issued. Also calculate the percentage changes in EPS when the economy expands or enters a recession. {5 Points] b} Repeat part [a] gssgrningmat the company goes through with recapitalization. What do you observe? [5 Points}