Fill in the table using the following information. Assets required for operation

Fill in the table using the following information. Assets required for operation: $2000 Case Afirm uses only equity financing Case Bfirm uses 30% debt with a 10% interest rate and 70% equity Case Cfirm uses 50% debt with a 12% interest rate and 50% equity A B C A B C Debt outstanding $ $ $ Stockholders equity Earnings before interest and taxes 300 300 300 Interest expense Earnings before taxes Taxes (40% of earnings) Net earnings Return on stockholders equity % % % What happens to the rate of return on the stockholders investment as the amount of debt increases? Why did the rate of interest increase in case C?