Black Berry Farms and Pea Pod Farms are each able to generate EBIT of $198,000. The separate capital structures for Black Berry and Pea Pod are presented below.

Black Berry				Pea Pod
Debt @ 9%		$1,150,000		Debt @ 9%		$750,000
Common stock		1,050,000		Common stock		1,450,000
Total		$2,200,000		Total		$2,200,000
Common shares		210,000		Common shares		290,000

a. Compute EPS for both firms (assume a 40 percent tax rate). (Round the final answers to 2 decimal places.)

	Black Berry	Pea Pod
EPS	$	$

b. Assuming a P/E ratio of 32 for each firm, what would be each firms share price? (Round your intermediate calculations and final answers to 2 decimal places.)

	Black Berry	Pea Pod
Share price	$	$

c. Assume the P/E ratio would be 22 for the riskier company in terms of heavy debt utilization in the capital structure and 33 for the less risky firm. What would the share price now be for each firm? (Round your intermediate calculations and final answers to 2 decimal places.)

	Black Berry	Pea Pod
Share price	$	$

d. This part of the question is not part of your Connect assignment.