P12-12 (similar to) Question Help Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $220,000 of 15% (annual interest) debt and 4,000 shares of common stock. The firm pays taxes at the rate of 25%. a. Using EBIT values of $78,000 and $117,000, determine the associated earnings per share (EPS). b. Using $78,000 of EBIT as a base, calculate the degree of financial leverage (DFL). c. Rework parts a and b assuming that the firm has $90,000 of 15% (annual interest) debt and 5,000 shares of common stock. a. Calculate the EPS for EBIT value of $78,000 below: (Round to the nearest dollar except for the EPS which should be rounded to the nearest cent.) EBIT $ Less: Interest Net profits before taxes Less: Taxes (25%) Net profit after taxes $ FA $ EPS (4,000 shares)