The board of directors of LuvMe Publishing Haus has commissioned a capital structure study. The company has a total assets of P50 million. It has earnings before interest and taxes (EBIT) of P9.0 million and is taxed at 25% The stock has a book value of P25 per share.

Additional information follows:

Percentage of Debt

0% 20% 30% 60%

Cost of debt

10.0% 10.9% 11.5% 16.5%

Required Rate of Return 0% 8.5% 9.5% 15.0%

Based on the above information using the debt ratio given, compute for the following:

1. Earnings per share (EPS)

2. Return on Equity (ROE)

3. Price per share