Reference no: EM131171176

River Cruises is all-equity-financed. Current Data Number ofshares 100,000 Price per share $ 10 Market value of shares $1,000,000 State of the Economy Slump Normal Boom Profits beforeinterest $ 81,250 137,500 199,000 Suppose it now issues $250,000 ofdebt at an interest rate of 10% and uses the proceeds to repurchase25,000 shares. Assume that the firm pays no taxes and that debtfinance has no impact on firm value. Refer to the above table tocompute the missing data. (Do not round intermediate calculations.Round "Earnings per share" to 3 decimal places. Enter "Return onshares" as a percent rounded to 2 decimal places.) Outcomes Numberof shares Price per share $10 Market value of shares $ Market valueof debt $ State of the Economy Slump Normal Boom Profits beforeinterest $81,250 $137,500 $199,000 Interest $ $ $ Equity earnings $ $ Earnings per share $ $ $ Return on shares % % %