Question $1$

KLM Sdn Bhd foresees that its pre$-$recapitalization earnings for the fiscal year will amount

to RM$7\mathrm{.}3$ million. The company presently possesses a total of $900,000$ outstanding

common stock shares and does not carry any debt. The shares of the company are now

being traded at a price of RM$40.$ The company is currently contemplating a recapitalization

strategy in which it plans to issue debt valued at RM$10\mathrm{.}0$ million, with a yield to maturity of

$10$ percent. The proceeds from this debt issuance will then be utilised to repurchase

common shares. Given the hypothetical scenario where the stock price remains

unchanged and, the company's tax rate is assumed to be $27\%.$ What would be the

company's earnings per share if it were to proceed with the recapitalization?