E V ezto.mheducation.com C + 88 A Week 2 - Assignment M Question 9 - Week 2 - Assignment - Connect (13) Subscriptions - YouTube [Solved] The separate capital structures for Lenow and... Week 2 - Assignment i Saved Help Save & Exit Submit Check my work 9 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. Lenow Hall Debt @ 10% $290, 000 Debt @ 10% $580, 000 0.36 Common stock, $10 par 580, 000 Common stock, $10 par 290, 000 points Total $870, 000 Total $870, 000 Common shares 58, 000 Common shares 29, 000 a. Complete the following table given earnings before interest and taxes of $33,000, $87,000, and $88,000. Assume the tax rate is 30 eBook percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.) What is the relationship between Hint EBIT Total Assets EBIT/TA % Lenow EPS Hall EPS the EPS of the two firms $ 33,000 $ 870,000 $ Print 87,000 $ 870,000 % $ 88,000 $ 870,000 % References b-1. What is the EBIT/TA rate when the firm's have equal EPS? EBIT/TA rate % Mc Graw HillE V ezto.mheducation.com C + 88 A Week 2 - Assignment M Question 9 - Week 2 - Assignment - Connect (13) Subscriptions - YouTube [Solved] The separate capital structures for Lenow and... Week 2 - Assignment i Saved Help Save & Exit Submit Check my work 9 b-2. What is the cost of debt? 0.36 points Cost of debt eBook Hint b-3. State the relationship between earnings per share and the level of EBIT. EPS is unaffected by financial leverage when the pre-tax return on assets (EBIT/TA) the cost of debt. Print References c. If the cost of debt went up to 12 percent and all other factors remained equal, what would be the break-even level for EBIT? Break-even level Mc Graw Hill