Calculate EPS at debt of $0, $250K, $500K, and $750K, assuming that the firm begins at zero debt and recap-italizes to each level in a single step.

Net income = NI = [EBIT - kd D](1-T).

EPS = NI/n.

$ 0 $300 100.00 $3.00

250 285 88.03 3.24

500 267 76.39 3.50

750 242 64.15 3.77

D NI n EPS

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