Lever Brothers has a debt ratio (debt to assets) of 20%.Management is wondering

Lever Brothers has a debt ratio (debt to assets) of 20%.Management is wondering if its current capital structure is tooconservative. Lever Brotherss present EBIT is $3 million andprofits available to common shareholders are $1680000 with457143 shares of common stock outstanding. If the firm were toinstead have a debt ratio of 40% additional interest expense wouldcause profits available to stockholders to decline to $1560000but only 342857 common shares would be outstanding. What is thedifference in EPS at a debt ratio of 40% versus 20%? A. $2.12 B.$1.95 C. $0.88 D. $1.16