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Your company doesn't face any taxes and has $501 million inassets, currently financed entirely with equity. Equity is worth$40.10 per share, and book value of equity is equal to market valueof equity. Also, let's assume that the firm's expected values forEBIT depend upon which state of the economy occurs this year, withthe possible values of EBIT and their associated probabilities asshown below:RecessionAverageBoom EBIT$51,000,000$101,000,000$171,000,000? Interest-10,020,000-10,020,000-10,020,000= EBT/NI40,980,00090,980,000160,980,000Shares = $51,000,000 x (1-.20) = $40,800,000/$40.10 =1,017,456EPS4.109.1016.11The firm is considering switching to a 20-percent debt capitalstructure, and has determined that they would have to pay a 10percent yield on perpetual debt in either event. What will be thelevel of expected EPS if they switch to the proposed capitalstructure? (Round your intermediate calculations and final answerto 2 decimal places except calculation of number of shares whichshould be rounded to nearest whole number.)The expected EPS will be equal to (.20 x 4.10) + (.50 x 9.10) +(.30 x 16.11) = $10.20