P13-1 EPS calculations and degree of financial leverage Northwestern Savings and Loan has a current capital...

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P13-1 EPS calculations and degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 16% annual interest debt and 2,000 shares of common stock. The firm pays taxes at the rate of 21%. a. Using EBIT values of $80,000 and $120,000, determine the associated earnings per share (EPS). b. Using $80,000 of EBIT as a base, calculate the degree of financial leverage (DFL). c. Rework parts a and b, assuming that the firm has $100,000 of 16% (annual interest) debt and 3,000 shares of common stock. P13-1 EPS calculations and degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 16% annual interest debt and 2,000 shares of common stock. The firm pays taxes at the rate of 21%. a. Using EBIT values of $80,000 and $120,000, determine the associated earnings per share (EPS). b. Using $80,000 of EBIT as a base, calculate the degree of financial leverage (DFL). c. Rework parts a and b, assuming that the firm has $100,000 of 16% (annual interest) debt and 3,000 shares of common stock.