what is the value of the E(ROIC) for firms U and L respectively? a. 7.5%, 7.5% b. 11.30%, 11.25% c. 11.25%, 11.30% d. 11.25%, 11.25%

Consider two small hypothetical firms, Firm U with zero debt financing and Firm L with $10,000 of 12% debt. Both firms have $20,000 in invested capital and a 25% federal-plus-state tax rate. (2) Complete the partial income statements and the firms' ratios. Total capital for both firms Tax rate for both firms Debt ratio for Firm U Debt ratio for Firm L Cost of debt for Firm L FIRM U \begin{tabular}{|c|c|c|} \hline & & \\ \hline & & \\ \hline 0.25 & 0.50 & 0.25 \\ \hline$6,000 & $9,000 & $12,000 \\ \hline 4,000 & 6,000 & 8,000 \\ \hline \end{tabular} E(ROIC) E(ROE) E(TIE) SD(ROIC) SD(ROE) SD(TIE) The cost of debt at different debt levels : FIRM L \begin{tabular}{|c|c|c|} \hline & & \\ \hline 0.25 & \multicolumn{1}{|c|}{0.50} & \multicolumn{1}{|c|}{0.25} \\ \hline $6,000 & $9,000 & $12,000 \\ \hline 4,000 & 6,000 & 8,000 \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \hline \end{tabular}