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BMW AUDI Debt @ 5% $300,000 Debt @ 7% $700,000 Common Stock @ $3.50 per Share $700,000 Common Stock @ $3.00 Per Share $300,000 TOTAL

BMW

AUDI

Debt @ 5%

$300,000

Debt @ 7%

$700,000

Common Stock @ $3.50 per Share

$700,000

Common Stock @ $3.00 Per Share

$300,000

TOTAL

$1,000,000

Total

$1,000,000

# Shares of Common Stock

200,000

100,000

Compute the Earnings Per Share (EPS) for both BMW, & AUDI.

A.

A. BMW $1.98, AUDI $5.60

B.

B. BMW $1.35, AUDI $2.46

C.

C. BMW $2.46, AUDI $1.35

D.

D. Need more information

Which firm (BMW or AUDI) has the higher Net Income?

A.

A. BMW

B.

B. AUDI

C.

C. They are the same

D.

D. Need more information

Which firm (BMW or AUDI) has the higher has the Earnings Per Share (EPS)?

A.

A. BMW

B.

B. AUDI

C.

C. They are the same

D.

D. Need more information

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