Sterling Optical and Royal Optical both make glass frames and each is able to generate earnings before interest and taxes of $106,000. The separate capital structures for Sterling and Royal are shown here: Sterling Debt @ 300 Common stock, 95 par Total Cotton shares Royal 636,000 Debt 104 424.000 common stock, $5 par $3,060,000 Total 84,800 Camon sharem $ 212.000 B40,000 $1.060,000 169,600 + a. Compute earnings per share for both firms. Assume a 30 percent tax rate. (Round your answers to 2 decimal places.) ot Earnings per Share ences Sterling Royal b. In part a, you should have gotten the same answer for both companies' earnings per share. Assuming a P/E ratio of 20 for each company, what would its stock price be? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock price c. Now as part of your analysis, assume the P/E ratio would be 14 for the riskler company in terms of heavy debt utilization in the capital structure and 22 for the less risky company What would the stock prices for the two fums be under these assumptions? (Note: Although interest rates also would likely be different based on risk, we will hold them constant for ease of analysis.) (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Stock Price Sterling Royal