River Cruises is all-equity-financed with 100,000 shares. It now proposes to issue $210,000 of debt at an interest rate of 10% and use the proceeds to repurchase 21,000 shares at $10 per share. Profits before interest are expected to be $121,000.

a. What is the ratio of price to expected earnings for River Cruises before it borrows the $210,000?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What is the ratio after it borrows?(Do not round intermediate calculations. Round your answer to 2 decimal places.)