b$-1.$ What is the EBIT$/$TA rate when the firm's have equal EPS?

b$-2.$ What is the cost of debt?

Cost of debt

b$-3.$ State the relationship between earnings per share and the level of EBIT.

EPS is unaffected by financial leverage when the pre$-$tax return on assets $($EBIT$/$TA$)$

the cost of debt.

c$.$ If the cost of debt went up to $12$ percent and all other factors remained equal, what would be the break$-$even level for EBIT?

Break$-$even level