The Lopez$-$Portillo Company has $$11\mathrm{.}6$ million in assets, $60$ percent financed by debt and $40$ percent financed by common stock. The interest rate on the debt is $14$ percent and the par value of the stock is $$10$ per share. President Lopez$-$Portillo is considering two financing plans for an expansion to $$23$ million in assets.

Under Plan A$,$ the debt$-$to$-$total$-$assets ratio will be maintained, but new debt will cost a whopping $17$ percent! Under Plan B$,$ only new common stock at $$10$ per share will be issued. The tax rate is $30$ percent.a$.$ If EBIT is $11$ percent on total assets, compute earnings per share $($EPS$)$ before the expansion and under the two alternatives.

Note: Round your answers to $2$ decimal places.

b$.$ What is the degree of financial leverage under each of the three plans?

Note: Round your answers to $2$ decimal places.

c$.$ If stock could be sold at $$20$ per share due to increased expectations for the firm's sales and earnings, compute earnings per share

for each alternative.

Note: Round your answers to $2$ decimal places.