Leverage Ratios
Unlevered Capital Structure
Shares
Levered Capital Structure
Shares
Earnings per Share (EPS)
Return on Equity (ROE)
$2,000
EPS
$2,000
EPS
EBIT
Debt Level
$1,000
4%
0%
$50
Firm value
Interest rate on debt
Tax rate
Book value of equity (per share)
EPS
ROE