The impact of financial leverage on return on equity and earnings per share Suppose Rinsemator Group is considering a project that will require $350,000 in assets. The project is expected to produce an EBIT (earnings before interest and taxes) of $60,000. The project will be financed with 100% equity. Common equity outstanding will be 10,000 shares. The company faces a tax rate of 35%. Using the preceding information, what will Rinsemator Group's return on equity (ROE) be for this project? 10.58% 8.91% 12.81 11.14% Rinsemator Group's earnings per share (EPS) will be if it finances this project with 100% equity. Rinsemator Group's CFO is also considering financing this project with 50% debt and 50% equity. The interest rate on the company's debt will be 13%. Because the company will finance only 50% of the project with equity, it will have only 5,000 shares outstanding. What will the ROE be on this project if the company decides to finance the project with 50% debt and 50% equity? 13.84% 11.76% 10.38% 14.53% Rinsemator Group's EPS will be if it finances this project with 50% equity and 50% debt. As a firm uses more debt in its capital structure, lenders will usually the interest rate charged