The impact of financial leverage on return on equity and earnings per share Consider this case: Suppose Khoshjamal Corporation is considering a project that will require $400,000 in assets. The project is expected to produce an EBIT (earnings before interest and taxes) of $55,000 The project will be financed with 100% equity Common equity outstanding will be 20,000 shares. The company faces a tax rate of 30%. Using the preceding information, what will Khoshjamal Corporation's return on equity (ROE) be for this project? 11.07% o 8.67% o 9.63% 0 10.59% Khoshjamal Corporation's earnings per share (EPS) will be if it finances this project with 100% equity $1.54 $2.03 $1.93 $1.64 $1.45