a. 2. Lilac Corporation condensed balance sheet is shown below (in $ million). Determine whether leverage (from long-term debt) benefits the shareholders. (Calculate return on common equity (ROCE) with debt as it is currently, then without any debt and the resultant interest expense) b. Compute the net operating profit after taxes (NOPAT) and the return on net operating assets (RNOA). Use ending values where averages are normally used. c. Disaggregate the Return on Common Equity into the Leverage component and the Spread component to show the favorable effect of leverage to equity holders. ASSETS Current assets 750,000 Noncurrent assets 2,250,000 Total assets 3,000,000 LIABILITIES Current liabilities 600,000 Noncurrent liabilities (6% bonds) 975,000 Common stockholder equity 1,425,000 Total liabilities and Equity 3,000,000 Additional information Net Income for year 2 is $262,500; and the Income tax rate is 40 percent All assets and current liabilities are considered operating, Use ending values where it calls for averages