An investor is considering investing in the long-term bonds and ordinary shares of Companies X LO 6 Long-Term Solvency and and Y. Both companies operate in the same industry. In addition, both companies pay a dividend Market Strength Ratios per share of 4 and a yield of 10 per cent on their long-term bonds. Other data for the two companies follow:

Calculate the debt to equity, interest coverage, and price/earnings ( \(\mathrm{P} / \mathrm{E})\) ratios, and the dividends yield, and then comment on the results. (Round calculations to one decimal place.)

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Company X Company Y Total Assets 2,400,000 1,080,000 Total Liabilities 1,080,000 594,000 Net Profit before Taxes 288,000 129,600 Interest Expense 97,200 53,460 Earnings per share 3.20 5.00 Market Price of Ordinary Shares 40 47.50