Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 16% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 40%. Using EBIT values of $80,000 and $120,000, determine the associated earnings per share (EPS). Using $80,000 of EBIT as a base, calculate the degree of financial leverage (DFL). Rework parts a and b assuming that the firm has $100,000 of 16% (annual interest) debt and 3,000 shares of common stock