4 You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the cer- tificate of deposit, you make an initial investment at the beginning of the first year. a. What single payment could be made at the beginning of the first year to achieve this objective? b. What amount could you pay at the end of each year annually for 10 years to achieve this same objective? 5 Sterling Optical and Royal Optical both make glass frames and each is able to generate earnings before interest and taxes of $132,000. The separate capital structures for Sterling and Royal are shown here: Sterling Debt @ 12% Common stock, S5 par Total ..... Common shares Royal $ 660.000 Debt @ 12% 440,000 Common stock. $5 par $1.100.000 Total 88.000 Common shares $ 220,000 880.000 $1,100.000 176.000 Compute earnings per share for both firms. Assume a 25 percent tax rate. b. In parta, you should have gotten the same answer for both companies' earn- ings per share. Assuming a P/E ratio of 22 for each company, what would its stock price be