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 @ 9% Common stock, $10 par Total $ 70,000 140,000 Common shares $ 210,000 14,000 Debt @ 9% Common stock, $10 par Total Common shares $ 140,000 70,000 $ 210,000 7,000 a. Complete the following table given earnings before interest and taxes of $12,000, $18,900, and $52,000. Assume the tax rate is 20 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 O wherever required. EBIT 69 12,000 $ Total Assets 210,000 EBIT/TA % Lenow EPS Hall EPS What is the relationship between the EPS of the two firms? % 69 69 $ 18,900 $ 210,000 % $ 52,000 $ 210,000 % 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 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