Loving Gardens (LG) has $8 million in assets, $500,000 EBIT, and a marginal tax rate equal to 40 percent. If LG's debt ratio (D/TA) is 30 percent, interest on its debt is 8 percent, whereas if the debt ratio is 50 percent, interest is 10 percent. LG will have 55,000 shares of stock outstanding if it is financed with 30 percent debt, but it will have 42,000 shares outstanding with 50 percent debt. Calculate LG's EPS and ROE (ROE =Net Income/Equity) for each capital structure. Do not round intermediate calculations. Round answers for EPS to nearest cent and for ROE two decimal places. Which capital structure is better? The capital structure with _ debt appears to be better.