The impact of financial leverage on return on equity and earnings per share Consider the following case of Green Rabbit Transportation Inc.: If the project is financed using 100% equity capital, then Green Rabbit's return on equity (ROE) on the project will be Rabbit's earnings per share (EPS) will be Alternatively, Green Rabbit Transportation Inc.'s CFO is also considering financing the project with 50% debt and 50% equity capital. The interest rate on the company's debt will be 10%. Because the company will finance only 50% of the project with equity, it will have only 12,500 shares outstanding. Green Rabbit Transportation Inc.'s ROE and the company's EPS will be. if management decides to finance the project with 50% debt and 50% equity. Typically, using financial leverage will a project's expected ROE