Please Answer for Plan A and Plan B in the first box. Please explain how you find the shares to solve for EPS.

Homework 2 Saved Help Save & Exit Submit Check my work 18 The Lopez-Portillo Company has $11.2 million in assets, 60 percent financed by debt and 40 percent financed by common stock. The interest rate on the debt is 9 percent and the par value of the stock is $10 3 per share. President Lopez-Portillo is considering two financing plans for an expansion to $21 million in points assets. Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost a whopping 12 percent! Under Plan B, only new common stock at $10 per share will be issued. The tax rate is 40 percent. eBook a. If EBIT is 10 percent on total assets, compute earnings per share (EPS) before the expansion and under the two alternatives. (Round your answers to 2 decimal places.) Hint Earnings per Share Print Current $ 0.69 Plan A Plan B b. What is the degree of financial leverage under each of the three plans? (Round your answers to 2 decimal places.) Degree of Financial Leverage Current Plan A Plan B Mc Graw Hill