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Below is data for calendar 20x1 for two companies. Actual earnings Company A $ 79,632 $504,000 0.167 Company B $ 176, 341 $ 943,000 0.175

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Below is data for calendar 20x1 for two companies. Actual earnings Company A $ 79,632 $504,000 0.167 Company B $ 176, 341 $ 943,000 0.175 BVt-1 Cost of equity capital Required: Calculate each firm's abnormal earnings and indicate which firm was better managed during calendar year 20X1

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