ANSWER THE FOLLOWING PROBLEMS AND PROVIDE STEP-BY-STEP EXPLANATION:

PROBLEM II. Given the following, identify the optimal capital structure for Chip Co. (Assume growth rate of 2%) Dividend per Cost of Debt Ratio share Equity 0% P5.50 11.5% 25% P6.00 12.0% 40% P6.50 13.0% 50% P7.00 14.0% 75% P7.50 15.0%PROBLEM Ill. The following information is available for Kebab Inc.: Current assets - P500,000 PPE - P4,000,000 Current liabilities - P30,000 Long-term debt - P2,500,000 Ordinary share capital - P200,000 . Accumulated profits - P1,770,000 Budget operations are as follows: @100,000 units @105,000 units Sales P3,000,000 P3,150,000 Expenses P2,800,000 P2,850,000 Operating income (EBIT) P200,000 P300,000 Earnings per share PO.20 P1.20 Compute the following: 1. Degree of operating leverage 2. Degree of financial leverage 3. Degree of total leverage