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Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $290,000 of 18% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 30% a. Using EBIT values of $75,000 and 5122,000, determine the associated earnings per share (EPS) b. Using $75,000 of EBIT as a base, calculate the degree of financial leverage (DFL). c. Rework parts a and b assuming that the firm has $105,000 of 18% (annual interest) debt and 3,000 shares of common stock. a. Calculate the EPS for EBIT value of $75,000 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 (30%) Net profit after taxes EPS (2,000 shares) Calculate the EPS for EBIT value of $122,000 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 (30%) Net profit after taxes $ EPS (2,000 shares) b. The degree of financial leverage (DFL) with $75,000 of EBIT as a base is (Round to two decimal places.) Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $290,000 of 18% annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 30% a. Using EBIT values of $75,000 and $122,000, determine the associated earnings per share (EPS). b. Using $75,000 of EBIT as a base, calculate the degree of financial leverage (DFL). c. Rework parts a and b assuming that the firm has $105,000 of 18% (annual interest) debt and 3,000 shares of common stock. c. Calculate the EPS for EBIT value of $75,000 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 (30%) Net profit after taxes $ EPS (3,000 shares) $ Calculate the EPS for EBIT value of $122,000 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 (30%) Net profit after taxes $ EPS (3,000 shares) The degree of financial leverage (DFL) with $75,000 of EBIT as a base is (Round to two decimal places.)