Question 2. (20 marks) (a) Helliton, Inc. has no debt outstanding and a total market value of $175,000. Earnings before interest and taxes, EBIT, are projected to be $16,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 30 percent higher. If there is a recession, then EBIT will be 70 percent lower. North Side is considering a $70,000 debt issue with a 7 percent interest rate. The proceeds will be used to repurchase shares of stock. There are currently 2,500 shares outstanding. Helliton has a tax rate of 34 percent. If the economy expands strongly, EPS will change by how many percent as compared to a normal economy, assuming that the firm recapitalizes? (12 marks)