Question: Using the data provided in Data for Question 11, demonstrate the effect that leverage would have on the Retum on Equity for Fim XYZ. In

Using the data provided in "Data for Question 11", demonstrate the effect that leverage would have on the Retum on Equity for Fim XYZ. In the Discussion box, briefly discuss how leverage affects shareholders both in good periods and bad periods. Low EBIT Unlevered ROE High EBIT Unlevered ROE Levered ROE Levered ROE Discussion (adjust cell height as necessary to fit response): Total Capital Equity Portion of Capital Debt Portion of Capital Tax Rate Interest Rate LOW EBIT Unlevered Levered $50,000 $50,000 $50,000 $25,000 $0 $25,000 30% 30% N/A 7% HIGH EBIT Unleveres. Levered $50,000 $50,000 $50,000 $25,000 $0 $25,000 30% 30% N/A 7% EBIT $3,000 $3,000 $10,000 $10,000
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