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Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented
Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented here. Lenow Debt 12x Common stock, sie par Total Connon shares Hall $200,000 Debt @ 10% 400,000 Connon stock, 510 par $600,000 Total 40,000 Common shares $400,000 200.000 $600,000 20,000 a. Complete the following table given earnings before interest and taxes of $24,000. $60,000, and $65,000. Assume the tax rate is 30 percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.) EBIT/TA Hall EPS What is the relationship between the EPS of the two firms? $ EBIT Total Assets 24,000 $ 600.000 60,000 $ 600,000 65,000 $ 600,000 % Lenow EPS % % 5 $ %
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