Ghost, Inc., has no debt outstanding and a total market value of $240,000. Earnings before interest and taxes, EBIT, are projected to be $32,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 15% higher. If there is a recession, then EBIT will be 30% lower. The company is considering a $80,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 15,000 shares outstanding. Ignore taxes for this problem. a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued.
a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession.
b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization.
b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession.
a-1 Recession EPS $0.97
Normal EPS $1.39
Expansion EPS Z $1.59
a-2 Recession percentage
change in EPS -30.0
Expansion percentage
change in EPS 15.0
b-1 Recession EPS $1.09
Normal EPS 15.00
Expansion EPS
b-2 Recession percentage
change in EPSE -36.36
Expansion percentage
change in EPS 18.18

1. revising for conciseness - eliminating flabby expressions, limiting long lead-ins, and dropping unnecessary fillerstime is money in any business environment. people want information communicated quickly and clearly. to make your writing more concise and understandable, avoid flabby expressions, long lead-ins, and unnecessary fillers. your audience will appreciate your brevity.1. if your writing contains a flabby expression like in view of the fact that, replace it with the word because / although / probably .for each of the following two sentences, choose the best revision.2. i am sending you this letter to inform you that we have experienced an unexpected surprise within our expense sheet, but we are positively certain we will solve it.1) we need to inform you that we have experienced an unexpected surprise with our expense sheet, but we are midway to an end result.2) we have identified a problem with our expense sheet, but we will solve it.3) i am sending you this letter to inform you that we have a problem with our expense sheet, but we are positively certain we have a solution.3. it is the user who should contact the center.1) everyone knows that it is the user who should contact the center.2) the user should contact the center.3) if there is a problem, the user should contact the center. read the following passage, and then answer the question.[1] you scheduled seven conference calls for this morning between 10 and 11 a. m. [2] generally, the company limits the number of conference calls to three per hour. [3] i’m letting you know that in the future, we should be more careful about scheduling.4. which revision limits the long lead-in in sentence 3? 1) in the future, we should be more careful about scheduling.2) i’m letting you know so that in the future we are more careful about scheduling calls.3) so that you know in the future, we should be more careful about scheduling.