Date Wireless has the following assets:Current assets:

Date Wireless has the following assets:

     Current assets:

Temporary$1,190,000   Permanent1,380,000   Capital assets7,950,000    Total assets$10,520,000   

Its operating profit (EBIT) is expected to be $2.9 million. Its tax rate is 30 percent. Shares are valued at $20. Capital structure is either short-term financing at 5 percent or equity. There is no long-term debt. (Round the final answers to 2 decimal places.)

a. Calculate expected earnings per share (EPS) if the firm is perfectly hedged.

EPS           $ 

b. Calculate expected EPS if it has a capital structure of 30% debt.

EPS           $ 

c. Recalculate a and b if short-term rates go to 12 percent.

  EPS  Hedged$     Capital structure