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 Hall

Debt @ $10\%$ $ $110,000$ Debt @ $10\%$ $ $220,000$

Common stock, $$10$ par $220,000$ Common stock, $$10$ par $110,000$

Total $ $330,000$ Total $ $330,000$

Common shares $22,000$ Common shares $11,000$

a$.$ Complete the following table given earnings before interest and taxes of $$15,000,$ $$33,000,$ and $$56,000.$ Assume the tax rate is $30$ percent.

Note: Negative amounts should be indicated by parentheses or a minus sign. Round your answers to $2$ decimal places. Leave no cells blank be certain to enter $0$ wherever required.

b$-1$ What is the EBIT$/$TA rate when the firm's have equal EPS?

b$-2.$ What is the cost of debt?

b$-3.$ State the relationship between earnings per share and the level of EBIT.

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?