In 2020, Jubail Corporation is currently analyzing two investment opportunities (buying stocks in the food and beverages industry). The intention of the management is to assign a Price-Earnings Ratio (P/E) of 16 times to the average firm in the food and beverages industry. However, Jubail Corporation will assign a 20% premium to the P/E of a company that uses conservative financing decisions in its capital structure. This is because of the nature of the industry. The following information were collected about two firms in the food and beverages industry with the following financial data: Firm 1 Firm 2 Profit Margin 5% 4.2% Total Assets Turnover 2.1 Times 3.5 Times Total Debt Ratio 60% 30% Earnings SAR 40,000,000 SAR 15,000,000 Shares Outstanding 16,000,000 6,250,000 As the Financial Manager for Jubail Corporation, you are required to provide your Chief Financial Officer with the following information: 1. Determine the Return on Equity for each firm by using the Du Pont Method of analysis 2. Determine the Earnings per Share for each company. 3. Applying the 20% to the Price-Earnings Ratio of the firm with the more conservative financial structure and the industry P/E ratio of the other firm, which firm has the higher stock price valuation