Consider the following case of Lost Pigeon Aviation Suppose Lost Pigeon Aviation is considering a project that will require $300,000 in assets. The project is expected to produce earnings before interest and taxes (EBIT) of $60,000. Common equity outstanding will be 25,000 shares. The company incurs a tax rate of 40%. If the project is financed using 10 Pigeon Aviation's return on equity (ROE) on the project equity capital, then will be .In addition, Lost Pigeon's earnings per share (EPS) will be Alternatively, Lost Pigeon Aviation's CFO is also considering financing the project with 50% debt and 50% equity capital. The interest rate on the company's debt will be 13%. Because the company will finance only 50% of the project with equity, it will have only 12,500 shares outstanding. Lost Pigeon Aviation's ROE and the company's EPS will be if management decides to finance the project with 50% debt and 50% equity. 16.20% and$1.94, respectively 17.01%and $1.84, respectively 20.25%and $2.33, respectively 17.82%and $2.04, respectively the interest rate charged. As a firm uses more debt in Its capital structure, lenders will usually