What follows are the liabilities and shareholders$$ equity sections of the statements of financial position for Kao Corp. and Bennington Corp. Each has assets totalling $$4\mathrm{.}2$ million.

Kao Corp. Bennington Corp.

Current liabilities $ $300,000$ Current liabilities $ $600,000$

Long$-$term debt, $10\%1,200,000$ Common shares

Common shares $(145,000$ shares issued$)2,900,000$

$(100,000$ shares issued$)2,000,000$ Retained earnings

Retained earnings $($Cash dividends, $$328,000)700,000$

$($Cash dividends, $$220,000)700,000$

$$4,200,000$ $$4,200,000$

For the year, each company has earned the same income before interest and tax.

Kao Corp. Bennington Corp.

Income before interest and taxes $ $1,200,000$ $$1,200,000$

Interest expense $120,0000$

$1,080,0001,200,000$

Income taxes $(30\%)324,000360,000$

Net income $ $756,000$ $ $840,000$

At year end, the market price of Kao$$s shares was $$101$ per share; it was $$63\mathrm{.}50$ for Bennington$$s$.$

Instructions

Which company is more profitable in terms of return on total assets? Round to two decimal places.

Which company is more profitable in terms of return on shareholders$$ equity? Round to two decimal places.

Which company has the greater net income per share? Neither company issued or reacquired shares during the year. Round to the nearest cent.

From the point of view of income, is it advantageous to Kao$$s shareholders to have the long$-$term debt outstanding? Why or why not?

What is each company$$s price earnings ratio? Round to one decimal place.

What is the book value per share for each company? Round to the nearest cent.