References Mailings Review View Help - AO EMIL ADA E 1 | 1 No Spac. Heading 1 Heading 2 Title Find Replace Select T Normal Paragraph Styles Editing 42. Typically, using debt increases the expected rate of return for an investment, but debt also increases risk to the common stockholder 43. A firm with EBIT of 10 million and 100% equity financing has 10 million shares outstanding. If they are in a 20% tax bracket and have total capital of 100 million what is their ROE? 44. What is the EPs of the firm above? 45. Now the firm has taken on 50% debt in their capital structure which lowers the outstanding shares to 5 million They are paying 5% interest on the debt. What is the new ROE 47. What are the EPS for the firm with 100% equity in the capital structure from 143 4 what is the EPS when the firm uses 50% debt in their capital structure