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Loving Gardens (LG) has $5 million in assets, $700,000EBIT, and a marginal tax rate equal to 40 percent. If LG's debt ratio (D/TA) is 70 percent, interest on its debt is 14 percent, whereas if the debt ratio is 40 percent, interest is 10 percent. LG will have 54,000 shares of stock outstanding if it is financed with 70 percent debt, but it will have 58,000 shares outstanding with 40 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. Which capital structure is better? The capital structure with debt appears to be better