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Pulp Paper Company and Holt Paper Company are each able to generate EBIT of $126,000. The separate capital structures for Pulp and Holtare presented below.

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Pulp Paper Company and Holt Paper Company are each able to generate EBIT of $126,000. The separate capital structures for Pulp and Holtare presented below. Debt 9 Con stock $750,000 650,000 Debt Common stock Total $350,000 1,050,000 $1,400,000 $1,400,000 Total Common shares 130,000 Common shares 210,000 a. Compute EPS for both firms (assume a 40 percent tax rate). (Round the final answers to 2 decimal places.) Holt EPS Pulp $ b. Assuming a P/E ratio of 24 for each firm, what would be each firm's share price? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Holt Share price Pulp $ c. Assume the P/E ratio would be 19 for the riskier company in terms of heavy debt utilization in the capital structure and 34 for the less risky firm. What would the share price now be for each firm? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Holt Pulp $ $ Share price

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