River Rat Inc. (RRI) provided you with the following financial information: River Rat Inc. Combined Statement of Income and Retained Earnings For the Year Ended December 31, 2017 Sales 1,200,000 Variable costs 450,000 Contribution margin 750,000 Fixed costs 525,000 Earnings before interest and taxes 225,000 Interest expense 75,000 Earnings before taxes 150,000 Tax expense 60,000 Net income 90,000 Opening retained earnings 280,000 Less: Dividends (100,000) Closing retained earnings 270,000 Throughout the year RRI had 60,000 common shares and 10,000 preferred shares outstanding. The preferred shares pay an annual dividend of $2, with the balance of the dividend being paid to the common shareholders. a) Calculate the EPS for RRI. I b) If RRI common shares sell for $12 50 per share, what is the P/E ratio? c) Calculate RRIs Degree of Operating Leverage d) Calculate RRIs Degree of Financial Leverage