K&L company has a capital of $1,000,000 with a debt ratio of 70% and paying interest for 10%. It has 15,000 shares outstanding that are expected to stay constant and it has the following information: Pricel Upit $100 Variable cost/Unit $40 Fixed costs $400,000 Tax rate 40% The expected units sold based on probability of economic situation: Economy Good Normal Bad Probability 0.1 0.2 0.7 Units Sold 20,000 15,000 5,000 1. The ROE in a bad economic situation would be * O a. 34% O b.-34% O c. $34 d. 10% 2. The EPS in a normal economic situation would be * O a.-17.2% O b. -$17.2 C.-$11.33 O d. $17.2. None of the above 3. The expected ROE would be * O a. 5% 5 O b. -8% O c. 9.9% O d. 11% O e. None of the above 1.52 am 4. The expected EPS would be * O a. 1.6% O b.$-1.6 O c.$1.6 O d.-1.6% O e. None of the above 5. The risk in the ROE would be * O a. 10% a b.66% O C.-10% O d.-6.6% d. e. None of the above 6. The risk in the EPS would be * O a. $20 a O b. $13.2 O c. 20% O d. $20.22 e. None of the above