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% $ 230,000 Debt @ 10% $ 460,000 Common stock, $10 par 460,000 Common stock, $10 par 230,000 Total $ 690,000 Total $ 690,000 Common shares 46,000 Common shares 23,000 a. Complete the following table given earnings before interest and taxes of $27,000, $69,000, and $71,000. 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.) what is the relationship between EBIT Total Assets EBIT/TA % Lenow EPS Hall EPS the EPS of the two firms $27,000 $690,000 % $69,000 $690,000 % $71,000 $690,000 %
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% | $ | 230,000 | Debt @ 10% | $ | 460,000 | |
| Common stock, $10 par | 460,000 | Common stock, $10 par | 230,000 | |||
| Total | $ | 690,000 | Total | $ | 690,000 | |
| Common shares | 46,000 | Common shares | 23,000 | |||
a. Complete the following table given earnings before interest and taxes of $27,000, $69,000, and $71,000. 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.)
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% | $ | 230,000 | Debt @ 10% | $ | 460,000 | |
| Common stock, $10 par | 460,000 | Common stock, $10 par | 230,000 | |||
| Total | $ | 690,000 | Total | $ | 690,000 | |
| Common shares | 46,000 | Common shares | 23,000 | |||
a. Complete the following table given earnings before interest and taxes of $27,000, $69,000, and $71,000. 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.)
| what is the relationship between | ||||||
| EBIT | Total Assets | EBIT/TA | % | Lenow EPS | Hall EPS | the EPS of the two firms |
| $27,000 | $690,000 | % | ||||
| $69,000 | $690,000 | % | ||||
| $71,000 | $690,000 | % |
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