Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The...
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Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented here. Debt @ 10% Common stock, $10 par Total Common shares Lenow S S $ a. Complete the following table given earnings before interest and taxes of $24,000, $60,000, and $65,000. Assume the tax rate is 30 percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.) EBIT Total Assets 24,000 $ 600,000 60,000 $ 600,000 65,000 $ 600,000 Hall $200,000 Debt @ 10% 400,000 Common stock, $10 par $600,000 Total 40,000 Common shares EBIT/TA % Lenow EPS % % $400,000 200,000 $600,000 20,000 Hall EPS What is the relationship between the EPS of the two firms? Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented here. Debt @ 10% Common stock, $10 par Total Common shares Lenow S S $ a. Complete the following table given earnings before interest and taxes of $24,000, $60,000, and $65,000. Assume the tax rate is 30 percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.) EBIT Total Assets 24,000 $ 600,000 60,000 $ 600,000 65,000 $ 600,000 Hall $200,000 Debt @ 10% 400,000 Common stock, $10 par $600,000 Total 40,000 Common shares EBIT/TA % Lenow EPS % % $400,000 200,000 $600,000 20,000 Hall EPS What is the relationship between the EPS of the two firms?
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Answer rating: 100% (QA)
To complete the table and calculate the EBITTA ratio earnings per share EPS for Lenow and Hall and the relationship between their EPS we can follow th... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
Posted Date:
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