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Problem 14-1 EBIT and Leverage Castle, Inc., has no debt outstanding and a total market value of $140,000. Earnings before interest and taxes, EBIT, are projected to be $32,000 if economic cond The proceeds will be used to repurchase s a-1. Calculate earnings per share, EPS, under ach of the three economic scenarios before any debt s sued. (Do not round tions are normal. If there is strong expansion in the economy, then EBIT will be 12 percent higher. If there t. The firm is considering a debt issue of $115,000 with an interest rate of 6 percent. hares of stock. There are currently 7.000 shares outstanding. Ignore taxes for this problem intermediate calculations and round your answers to 2 decimal places, eg 32%) Normal Expansion a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to the nearest whole number, e.g.. 32.) Expansion b-1. Calculate earnings per share (EPS) under each of the three economic reca scenarios assuming the company goes through with e.g. 32.16.) (Do not round intermediate calculations and round your answers to 2 decimal places Normal Prev 10f 8 Next >