iPad 7:40 PM 100% . 6 3.00 points Problem 5-16 Earnings per share and financial leverage [LO5-4] Lenow's Drug Stores and Hall's Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented here Debt @ 10% Common stock, $10 par 200,000 100,000 $100.000 Debt @ 10% 200,000 Common stock, $10 par 300,000 Total 20,000 Common shares 10,000 a. Complete the following table given eamings before interest and taxes of $20,000, $30,000, and $120,000. Assume the tax rate is 30 percent. (Round your answers to 2 decimal places.) What is the relationship between $20,000 00000 s 30.00300.000 120,000 300,000 b-1. What is the EBIT/TA rate when the firm's have equal EPS? EBITITA rate b 2. What is the cost of debt? b-3. State the relationship between earnings per share and the level of EBIT EPS is unaffected by financial leverage when the pre-tax return on assets (EBITITA) the cost of debt c. If the cost of debt went up to 12 percent and all other factors remained equal what would be the break-even level for EBIT