Need help with part b

Homework: Debt Policy Assignment Saved 2 River Cruises is all-equity-financed with 100,000 shares. It now proposes to issue $340,000 of debt at an interest rate of 12% and use the proceeds to repurchase 34,000 shares at $10 per share. Profits before interest are expected to be $134,000. 3.5 a. What is the ratio of price to expected earnings for River Cruises before it borrows the $340,000? (Do not round intermediate points calculations. Round your answer to 2 decimal places.) Price-earnings ratio 7.46 eBook Hint b. What is the ratio after it borrows? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Print Price-earnings ratio