Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented here. Lenow Debt @ 9% Common stock, $10 par Total Common shares Hall $ 130,000 Debt @ 9% 260,000 Common stock, $10 par $390,000 Total 26,000 Common shares $ 260,000 130,000 $390,000 13,000 a. Complete the following table given earnings before interest and taxes of $17,000, $35,100, and $58,000. Assume the tax rate is 20 percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.) What is the relationship between the EPS of the two firms? $ $ $ EBIT 17,000 35,100 58,000 Total Assets $ 390,000 $ 390,000 $ 390,000 EBIT/TA % 20.00 % % % Lenow EPS $ 0.16 $ 0.72 $ 1.42 Hall EPS $ (0.49) $ 0.72 $ 2.13 b-1. What is the EBIT/TA rate when the firm's have equal EPS? EBIT/TA rate 90% b-2. What is the cost of debt? 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 (EBIT/TA) the cost of debt. c. If the cost of debt went up to 11 percent and all other factors remained equal, what would be the break-even level for EBIT? Break-even level