Integrative Optimal capital structure Medallion Cooling Systems, Inc., has a set of $0.400,000, EBIT of $1,970.000, and preferred dividends of $200.000 and is taxed at a rate of 40%. In an effort to determine the opomal cap structure, the firm has assembled data on the cost of debt, the number of shares of common stock for various levels of indebtedness, and the overal required return on investment Capital structure Number of common debt ratio Cost of debito stock shares Required retur, 0% 0% 205.000 11.8% 15 78 175.000 133 30 136.000 142 45 11.8 108,000 158 60 14.7 75.000 a. Calculate camings per share for each level of indebtedness b. Use the equation Po-LPS/r, and the earnings per share calculated in part (n) to calculate a price per share for each level of indebtedness. 20.3 a. Calculate earnings per share for each level of indebtedness. b. Use the equation Po=EPS/r, and the earnings per share calculated in part (a) to calculate a price per share for each level of indebtedness. c. Choose the optimal capital structure. Justify your choice. a. Calculate earnings per share for each level of indebtedness. Calculate the EPS below: (Round to the nearest dollar. Round the EPS to the nearest cent.) Debt Ratio EBIT 0% 1,970,000 $ Less: Interest $ $ $ $ Taxes @40% Net profit Less: Preferred dividends $ Profits available to common stockholders $ # shares outstanding $ 205,000 $ EPS