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. Lenow Hall Debt @ 8% Common stock, $10 par Total $ 240,000 480,000 Debt @ 8% Common shares $ 720,000 48,000 Common stock, $10 par Total $ 480,000 240,000 Common shares $ 720,000 24,000 a. Complete the following table given earnings before Interest and taxes of $28,000, $57,600, and $72,000. Assume the tax rate is 10 percent. Note: Negative amounts should be Indicated by parentheses or a minus sign. Round your answers to 2 decimal places. Leave no cells blank be certain to enter O wherever required. EBIT $ Total Assets 28,000 $ 720,000 EBIT/TA % Lenow EPS Hall EPS What is the relationship between the EPS of the two firms? $ 57,600 $ 720,000 3.89 % $ 8.00 % 3.08 $ 72,000 $ 720,000 10.00 % b-1 What Is the EBIT/TA rate when the firm's have equal EPS? EBIT/TA rate b-2. What is the cost of debt? Cost of debt % 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. c. If the cost of debt went up to 10 percent and all other factors remained equal, what would be the break-even level for EBIT? Break-even level 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 @ 8% Common stock, $10 par Total $ 240,000 480,000 Debt @ 8% Common shares $ 720,000 48,000 Common stock, $10 par Total $ 480,000 240,000 Common shares $ 720,000 24,000 a. Complete the following table given earnings before Interest and taxes of $28,000, $57,600, and $72,000. Assume the tax rate is 10 percent. Note: Negative amounts should be Indicated by parentheses or a minus sign. Round your answers to 2 decimal places. Leave no cells blank be certain to enter O wherever required. EBIT $ Total Assets 28,000 $ 720,000 EBIT/TA % Lenow EPS Hall EPS What is the relationship between the EPS of the two firms? $ 57,600 $ 720,000 3.89 % $ 8.00 % 3.08 $ 72,000 $ 720,000 10.00 % b-1 What Is the EBIT/TA rate when the firm's have equal EPS? EBIT/TA rate b-2. What is the cost of debt? Cost of debt % 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. c. If the cost of debt went up to 10 percent and all other factors remained equal, what would be the break-even level for EBIT? Break-even level