Fill in the table using the following information

Assets required for operation: $2,000

Case A: firm uses only equity financing

Case B: firm uses 30% debt with a 10% interest rate and 70% equity

CaseC: firm uses 50% debt with a 12% interest rate and 50% equity

A B C

Debt Outstanding $ $ $

Stockholders' Equity

Earnings before interest & taxs 300 300 300

Interest Expense

Earnings before taxes

Taxes (40% of earnings)

Net earnings

Return on stockholders equity % % %

What happens to the rate of return on the stockholders' investment as the amount of debt increases? Why did the rate of interest increase in Case C?

I hope someone can help. Please show all work and explain in detail. Thank you:-)