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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. Debt @ 10% Common stack, $10 par Total Common shares S520,000 260,000 S 700,000 26,000 $260.000 Debt @ 10% 520,000 Common stock, $10 par $780,000 Total 52,000 Common shares a. Complete the following table gieneings before interest and taxes of $30,000, S78,000, and $80,000. 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.) What is the relationship between EBIT Total assets EBIT/TA % Lenow EPS Hall EPS the EPS of the two firms? $30.000 780,000 $ 78.000 $780,000 $ 80.000 $780,000
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