3.1 Network Solutions Limited, a listed company, is considering two options for its capital structure. Ordinary shares (Number of shares outstanding) Share price Debt capital Total Assets Option A 800000 $3.00 $0 $2,400,000 Option B 360000 $4.00 $960,000 $2,400,000 Additional information: The expected return on assets in the worst-case scenario is 4.5%, and in the best-case scenario; it is 11%. Interest on debt capital is 8%. The company tax rate is 28% Required: (a) Calculate earnings per share (EPS) in both the above scenarios (worst case and best case) for Option A and Option B. (4 marks) (b) Comment on the financial leverage effect on the company's EPS. (2 marks)