Problem 15.05 Oancial Love Picta) Question of 10 Check My Work (a remaining) eBook Firms HL and LL are identical except for their financial leverage ratios and the Interest rates they pay on debt. Each has $30 million in invested capital, has $4.5 million of EBIT, and is in the 25% federal-plus-state tax bracket. Firm HL, however, has a debt-to-capital ratio of 60% and pays 12% Interest on its debt, whereas LL has a 25% debt-to-capital ratio and pays only 8% Interest on its debt. Neither firm uses preferred stock in its capital structure a. Calculate the retum en invested capital (ROC) for each firm, Round your answers to two decimal places A-Z % ROIC for firm ROIC for firm HLE b. Calculate the rate of return on equity (ROE) for each firm. Round your answers to two decimal places ROE for firme ROE for im HL c. Observing that has a higher ROE, L's treasure is thinking of raising the debt-to-capital ratio from 25% to 60% even though that would increase L's interest rate on aldetit te 15% Cakulate the new ROE for L Round your answer to two decimal places. Check My Work aremaining) Prehim 13.05 dinancial Loverage feel ortof 10 Submit Agen for Grading MacBook Air DOO esc 80 F2 FA o