Bavarian Brew EPS Bavarian Brew, an Unlevered Firm, Has a Perpetual EBIT of Perpetual

Bavarian Brew EPS
Bavarian Brew, an unlevered firm, has a perpetual EBIT of $500,000. The required return on assets for the firm’s assets is 10%. The company has 250,000 shares outstanding, trading at $20 per share. The company is considering raising $1 million in debt with a required return of 6% and would use the proceeds to repurchase 50,000 shares of outstanding stock.

-What are Bavarian Brew's earnings per share before the restructuring? Assume no corporate taxes.

A) $2.50
B) $2.25
C) $2.00
D) $1.75