Cabot Corp Has a Debt Ratio (Debt to Assets)of 60 $$162
B)$1

Cabot Corp has a debt ratio (debt to assets) of 60%.Management is wondering if its current capital structure is too conservative.Cabot Corp's present EBIT is $4.5 million,and profits available to ordinary shareholders are $2,791,800,with 384,000 shares of ordinary shares outstanding.If the firm were to instead have a debt ratio of 80%,additional interest expense would cause profits available to shareholders to decline to $2,732,400,but only 307,200 ordinary shares would be outstanding.What is the difference in EPS at a debt ratio of 80% versus 60%?

A) $$1.62
B) $1.33
C) $7.27
D) $-0.15