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Lenow's Drug Stores and Hall's Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented
Lenow's Drug Stores and Hall's Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented here. Hall Lenow Debt 8% 90,000 Debt 8% 180,000 Common stock, $10 par 180,000 Common stock, $10 par 90,000 Total 270,000 Total $270,000 Common shares 18,000 Common shares 9,000 a. Complete the following table given earnings before interest and taxes of $14,000, S21,600, and $54,000. Assume the tax rate is 10 percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.) What is the relationship between EBIT Total assets EBITITA Lenow EPS Hall EPS the EPS of the two firms? 14,000 270,000 5.19 21.600 270.000 8.00% 54,000 270,000 20.00
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