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Black Berry Farms and Pea Pod Farms are each able to generate EBIT of $ 2 3 2 , 0 0 0 . The separate
Black Berry Farms and Pea Pod Farms are each able to generate EBIT of $ The separate capital structures for Black Berry and Pea Pod are presented below.
a Compute EPS for both firms assume a percent tax rateRound the final answers to decimal places.
tableBlack Berry,Pea Pod
b Assuming a PE ratio of for each firm, what would be each firm's share price? Round your intermediate calculations and final answers to decimal places.
tableShare price,Black Berrv,Pea Pod
c Assume the PE ratio would be for the riskier company in terms of heavy debt utilization in the capital structure and for the less risky firm. What would the share price now be for each firm? Round your intermediate calculations and final answers to decimal places.
tableBlack Berry,Pea PodShare price,$$
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