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B Pulp Paper Company and Holt Paper Company are each able to generate EBIT of $84,000. The separate capital structures for Pulp and Holt are

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B Pulp Paper Company and Holt Paper Company are each able to generate EBIT of $84,000. The separate capital structures for Pulp and Holt are presented below Pulp Debt 7% Comon stock $650,000 550.000 Debt 73 Common stock $250,000 950.000 Total $1,200,000 Total $1,200,000 Common shares 110,000 Common shares 190,000 a. Compute EPS for both firms (assume a 40 percent tax rate) (Round the final answers to 2 decimal places.) Pulp Holt EPS b. Assuming a Pe ratio of 22 for each firm, what would be each firm's share price? (Do not round Intermediate calculations. Round the final answers to 2 decimal places.) Pulp Holt Share price c. Assume the P/E ratio would be 17 for the riskier company in terms of heavy debt utilization in the capital structure and 28 for the less risky firm. What would the share price now be for each firm? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

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