Problem 20-03 Fill in the table using the following information. Assets required for operation: 59,000 Firm A uses only equity financing Firm Buses 40% debt with an 8% interest rate and 60% equity Firm C uses 50% debt with a 10% interest rate and 50% equity Firm Duses 50% preferred stock financing with a dividend rate of 10% and 50% equity financing Earnings before interest and taxes: $900 If your answer is zero, enter *0. Round your answers for monetary values to the nearest cent. Round your answers for percentage values to one decimal place. B D Debt $ $ $ 5 Preferred stock $ $ $ 5 Common stock $ $ $ Earnings before interest and taxes $900.00 $900.00 $900.00 $900.00 Interest expense $ $ Earnings before taxes $ Taxes (40% of earnings) $ 3 Preferred stock dividends s Income available to common stockholders $ 5 Return on common stock $ $ $ 5 $ camore Taxes (40% of earnings) Preferred stock dividends Incore available to common stockholders Return on common stock 5 5 $ 5 5 W What happens to the common stockholders' return on equity as the amount of debt increases? Why is the rate of interest greater in case C? Why is the return lower when the form unes preferred stock estead of debt? Other things equal, the return on common stock Select as the firm uses financial beverage. As the firm becomes Select Mnancially leveraged Select vin financiatok), the rate of interest will increase. The retum is lower when the firm user preferred stock instead of debt because the select var nor tax deductible as opposed to the select Which type of financing inwolves less tik for the firm? Assuncomparablet misky to hatom poredning Check My Work (remaining) debt friandi