Using the data below, demonstrate the effect that leverage would have on the Return on Equity.

LOW EBIT HIGH EBIT Unlevered Levered Unlevered Levered Total Capital $50,000 $50,000 $50,000 $50,000 Equity Portion of Capital $50,000 $25,000 $50,000 $25,000 Debt Portion of Capital SO $25,000 SO $25,000 Tax Rate 30% 30% 30% 30% Interest Rate N/A 7% N/A 7% EBIT $3,000 $3,000 $10,000 $10,000