Firms HL and UL are identical except for their finanoial leverage ratios and the interest rates they pay on debt. Each has $10 million in invested capital, has $1.5 malion of EarT, and is in the 25% federal-plus-state tax bracket. Both firms are small with average sales of $25 million or less during the past 3 years, sa both are exempt fram the interest deduction. iimitation. Firm HL, howevec, has a debt-to-capital ratio of 50% and pays 11% interest on its debt, whereas U, has a 20% debt-to-capital ratio and pays only 8% interest on its debt. Neither firm uses preferred stock in its capital structure. a. Calculate the return on ievested capital (RotC) for each firm, Round your answers to two decimal places. ROTC for firm LL Rotc for firm HL: b. Calculate the retum on equity (aOe) for each firm. Round your answers to two decimal places. ROE for firm LL: ROE for firm He: c. Observing that HL has a higher ROE, L's treasurer is thinking of raising the debt-to-capial ratio from 20% to 60% even though that would increase LL's interest ratn an all debt to 15%. Calculate the new Roe for LL flound your answer to two decimal places