ebook Firms HL and LL are identical except for their financial leverage ratios and the interest rates they pay on debt. Each has $15 million in invested capital, has $2.25 million of EBIT, and is in the 25% federal-plus-state tax bracket. Firm HL, however, has a debt-to-capital ratio of 45% and pays 11% interest on its debt, whereas LL has a 35% debt-to-capital ratio and pays only 9% interest on its debt. Neither firm uses preferred stock in its capital structure a. Calculate the return on invested capital (ROTC) for each firm. Round your answers to two decimal places. ROIC for firm LLI 11.25 ROIC for firm HLI 11.25 % b. Calculate the rate of return on equity (ROE) for each firm. Round your answers to two decimal places ROE for firm LL ROE for firm HL c. Observing that HL has a higher ROE LLS treasurer is thinking of raising the debt to capital ratio from 35% to 50% even though that would increases interest rate on all debt to 15%. Calculate the new BOE for LL. Round your answer to two decimal places Grade it Now Save & Continue