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Pulp Paper Company and Holt Paper Company are each able to generate EBIT of $440,000. 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 $440,000. The separate capital structures for Pulp and Holtare presented below. Pulp Debt 7% Common stock $1,050,000 950,000 $2,000,000 Debt 7 Common stock $650,000 Total Total $2,000,000 Common shares 190,000 Common shares a. Compute EPS for both firms (assume a 40 percent tax rate). (Round the final answers to 2 decimal places.) Pulp Holt EPS b. Assuming a P/E ratio of 30 for each tim. what would be each firm's share price? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Pulp Holt Share pics c. Assume the Pe ratio would be 21 for the riskler company in terms of heavy debt utilization in the capital structure and 32 for the less tisky firm. What would the share price now be for each firm? (Do not round Intermediate calculations. Round the final answers to 2 decimal places.) Share price

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