Question: PLEASE USE EXCEL AND SHOW ALL THE FORMULAS USED- EXPLAIN WITH DETAIL INFORMATION. THANK YOU The impact of financial leverage on return on equity and

PLEASE USE EXCEL AND SHOW ALL THE FORMULAS USED- EXPLAIN WITH DETAIL INFORMATION. THANK YOU

PLEASE USE EXCEL AND SHOW ALL THE FORMULAS USED- EXPLAIN WITH DETAIL INFORMATION. THANK YOU The impact of financial leverage on return on equity and earnings per share Consider the following case of Free Spirit Industries

The impact of financial leverage on return on equity and earnings per share Consider the following case of Free Spirit Industries Inc.: Suppose Free Spirit Industries Inc. is considering a project that will require $200,000 in assets. The project is expected to produce earnings before interest and taxes (EBIT) of $50,000. Common equity outstanding will be 15,000 shares. The company incurs a tax rate of 35%. . If the project is financed using 100% equity capital, then Free Spirit Industries Inc.'s return on equity (ROE) on the In addition, Free Spirit's earnings per share (EPS) will be project will bel 14.63% 16.25% 13.00% | Alternatively,"| 17.06% dustries Inc.'s CFO is also considering financing the project with 50% debt and 50%

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