Reliable Gearing currently is all$-$equity$-$financed. It has $27,000$ shares of equity outstanding, selling at $$100$ a share. The firm is considering a capital restructuring. The low$-$debt plan calls for a debt issue of $$370,000$ with the proceeds used to buy back stock. The high$-$debt plan would exchange $$570,000$ of debt for equity. The debt will pay an interest rate of $12\%.$ The firm pays no taxes.

What will be the debt$-$to$-$equity ratio if it borrows $$370,000?$

If earnings before interest and tax $($EBIT$)$ are $$280,000,$ what will be earnings per share $($EPS$)$ if Reliable borrows $$370,000?$

If earnings before interest and tax $($EBIT$)$ are $$280,000,$ what will be earnings per share $($EPS$)$ if Reliable borrows $$570,000?$