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2. You plan to invest in one of two courier service companies, Ben and Den, that were recently founded and are about to commence operations.

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2. You plan to invest in one of two courier service companies, Ben and Den, that were recently founded and are about to commence operations. They are identical except for their use of debt (wa) and the interest rates on their debt-Fem uses more debt and thus must pay a higher interest rate. Based on the data given below, how much higher or lower will Fem's expected EPS be versus that of Gem, i.e., what is EPSHigh - EPSlow? Applicable to Both Firms Capital $3,000,000 EBIT $500,000 Tax rate 35% Firm Fem's Data wa 70% Shares 100,000 Int. rate 12% Firm Gem's Data Wd 20% Shares 230,000 Int. rate 10%

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