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Please share the steps while providing the answer Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate
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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 here. Lenow Debt @ 9% Common stock, $10 par Total Common shares Hall $190,000 Debt @ 9% 380,000 Common stock, $10 par $570,000 Total 38,000 Common shares $380,000 190,000 $570,000 19,000 a. Complete the following table given earnings before interest and taxes of $23,000, $51,300, and $64,000. Assume the tax rate is 20 percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.) $ EBIT Total Assets 23,000 $ 570,000 51,300 $ 570,000 64,000 $ 570,000 What is the relationship between EBIT/TA % Lenow EPS Hall EPS the EPS of the two firms? 4.04% $ 0.12/ $ (0.47) Lenow EPS > Hall EPS 9.00% $ 0.72 $ 0.72 Lenow EPS = Hall EPS 11.23% $ 0.99 $ 1.25 Lenow EPSStep by Step Solution
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