Evaluating Tampa Manufacturing's Capital Structure Tampa Manufacturing, an established producer of printing equipment, expects its sales to remain flat for the next 3 to 5 years because of both a weak economic outlook and an expectation of little new printing technology development over that period. On the basis of this scenario, the firm's board has instructed its management to institute programs that will allow it to operate more efficiently, earn higher profits, and, most important, maximize share value. In this regard, the firm's chief financial officer CFO), Jon Lawson, has been charged with evaluating the firm's capital structure. Lawson believes hat the current capital structure which contains 10% de and 90% equity, may lack adequate financial leverage. To evaluate the firm's capital structure, Lawson has gathered the data summa zed in the folowing table onthe current capital structure (10% debt ratio) and two alternative capital structures-A (30% debt ratio) and B (50% debt ratio-that he would like to consider. Capital Structurea Source of capital Long-term debt Coupon interest rateb Common stock Current (10% debt) $1,000,000 9.0% 100,000 shares (30% debt) $3,000,000 10.0% 70,000 shares (50% debt) S5,000,000 12 0% 40,000 shares a. Use the current level of EBIT to calculate the times interest earned ratio for each capital structure. The times interest earned ratio for the 10% debt ratio will be L Round to two decimal places