Loving Gardens (LG) has $7 million in assets, $600,000 EBIT, and a marginal tax rate equal to 40 percent. If LG's debt ratio (D/TA) is 30 percent, interest on its debt is 7 percent, whereas if the debt ratio is 50 percent, interest is 12 percent. LG will have 82,000 shares of stock outstanding if it is financed with 30 percent debt, but it will have 65,000 shares outstanding with 50 percent debt. Calculate LG's EPS and ROE (ROE = Net income/Equity) for each capital structure. Do not round intermediate calculations. Round your answers for EPS to the nearest cent and for ROE to two decimal places.

	30% debt		50% debt
EPS	$		$
ROE	%		%

Which capital structure is better?

The capital structure with -Select- 30% or 50% debt appears to be better.

please explain step by step using excel