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 $160,000 Debt 9% 320,000 Common stock, $10 par $ 480,000 Total 12,000 Cammon shares $320,000 160,000 $480,000 16,000 a. Complete the following table given earnings before interest and taxes of $20,000 $43.200, and $61,000. 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/TA % Lenow EPS Hall EPS S EBIT Total Assets 20.000 S 480,000 43,200 $ 480,000 61,000 $ 480,000 S % S % b-1. What is the EBIT/TA rate when the firm's have equal EPS? EBIT/TA rate 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 retum 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