Edsel Research Labs has $27 million in assets. Currently half of these assets are financed with long-term debt at 5 percent and half with common stock having a par value of $10. Ms. Edsel, the Vice President of Finance, wishes to analyze two refinancing plans, one with more debt (D) and one with more equity-(E). The company earns a return on assets before interest and taxes of 5 percent. The tax rate is 30 percent. Under Plan D, a $6.75 million long-term bond would be sold at an interest rate of 11 percent and 675,000 shares of stock would be purchased in the market at $10 per share and retired. Under Plan E, 675,000 shares of stock would be sold at $10 per share and the $6,750,000 in proceeds would be used to reduce long-term debt. a-1. Compute earnings per share considering the current plan and the two new plans. Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. Current Plan D Plan E Answer is not complete. Earnings per Share a-2. Which plan(s) would produce the highest EPS? Note that due to tax loss carry- forwards and carry-backs, taxes can be a negative number. Plan D Plan Ex Current Plan and Plan E Current Plan and Plan D b. Which plan would be most favorable if return on assets increased to 8 percent? Compare the current plan and the two new plans. Current Plan D Plan E Earnings per Share a-2. Which plan(s) would produce the highest EPS? Note that due to tax loss carry- forwards and carry-backs, taxes can be a negative number. Plan D Plan E Current Plan and Plan E Current Plan and Plan D b. Which plan would be most favorable if return on assets increased to 8 percent? Compare the current plan and the two new plans. Current Plan and Plan D Plan D Plan E Current Plan and Plan E c. Assuming return on assets is back to the original 5 percent, but the interest rate on new debt in Plan D is 7 percent, which of the three plans will produce the highest EPS? Current Plan and Plan E Plan D Plan E Current Plan and Plan D