Please correct answer and don't use hand raiting Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate capitalstructures for Lenow and Hall are presented here.LenowHallDebt @9%Common stock, $10 par$160,000320,000Debt @9%TotalCommon shares$ 480,00032,000Common stock, $10 parTotalCommon shares$ 320,000160,000$ 480,00016,000a. Complete the following table given earnings before interest and taxes of $20,000, $43,200, and $61,000. Assume the tax rate is 20percent.Note: Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places. Leave nocells blank be certain to enter O wherever required.EBITTotal AssetsEBIT/TA%Lenow EPSHall EPSWhat is the relationship between theEPS of the two firms?$20,000 $ 480,000%Lenow EPS Hall EPS$43,200 $480,000%Lenow EPS Hall EPS$61,000 $480,000%Lenow EPS

Here is a brief explanation of how I came to the findings:1. Part A of the EPS Calculation:I started…

Answered: Lenow Drug Stores and Hall…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

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The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures.Total assets$300,000Stockholders' equity—common150,000Total stockholders' equity200,000Sales revenue100,000Net income25,000Number of shares of common stock6,000Common dividends5,000Preferred dividends7,000What is the return on common stockholders' equity ratio for Benedict?
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Assume the following data for Cable Corporation and Multi-Media Incorporated. Multi-Media Incorporated Cable Corporation $ 39,800 352,000 409,000 $ 190,000 2,170,000 966,000 234,000 545,000 175,000 421,000 Net income Sales Total assets Total debt Stockholders' equity a. 1. Compute return on stockholders' equity for both firms. Note: Input your answers as a percent rounded to 2 decimal places. Cable Corporation Multi-Media, Incorporated 2. Which firm has the higher return? Return on Stockholders' Equity % %
The following information pertains to Sunland Company. Assume that all balance sheet amounts represent average balance figures. Total assets Stockholders' equity-common Total stockholders' equity Sales revenue Net income Number of shares of common stock Common dividends Preferred dividends What is Sunland's payout ratio? O 24.6%. O 9.6%. O 17.9%. O 37.9%. $355000 235000 294000 97000 21100 6000 5200 8500
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Assume the following data for Cable Corporation and Multi-Media Incorporated Net income Sales Total assets Total debt Stockholders' equity Cable Corporation Cable Corporation Multi-Media, Incorporated $ 31,200 317,000 402,000 163,000 239,000 a. 1. Compute return on stockholders' equity for both firms. Note: Input your answers as a percent rounded to 2 decimal places. Return on Stockholders' Equity do do % $ % Multi-Media Incorporated $ 140,000 2,700,000 965,000 542,000 423,000
Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange. Selected data on the two companies are shown in the following table: Apex $750 Pinnacle $215 $100 $ 30 50 30 32 11 $ 2.00 $0.90 $1.00 $0.40 16 11 45% 40% Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share P/E ratio Dividend payout ratio Assume that there are immediate synergistic benefits of $3 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places): a. 20 percent premium for Pinnacle $ b. 30 percent premium for Pinnacle $ c. 40 percent premium for Pinnacle $
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Υ7 20Y6 20Υ5 Total assets $192,000 $173,000 $154,000 Notes payable (8% interest) 60,000 60,000 60,000 Common stock 24,000 24,000 24,000 Preferred 4% stock, $100 par 12.000 12,000 12,000 (no change during year) Retained earnings 70,415 45,870 36,000 The 20Y7 net income was $25,025, and the 20Y6 net income was $10,350. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y6 and 20Y7. Round percentages to one decimal place. 20Y7 20Υ6 Return on total assets % Return on stockholders' equity Return on common stockholders' equity % b. The profitability ratios indicate that the company's profitability has Since the rate of return on total…
6. The following is a list of selected account balances taken from the December 31, 2021, general ledger of Selecta Corp. Account Payable 50,000 Accounts Receivable 45,500 Ordinary Share Capital 126,000 Paid in Capital in Excess of Par –Ordinary Share Capital 110,500 Paid in Capital in Excess of Par – Preferred Share Capital 10,250 Preference Share Capital 58,000 Preference Share capital Subscribed 6,000 Retained Earnings 20,500 Subscription Receivable –Preference 10,500 Compute for total stockholder’s equity for Selecta Corp. On December 31, 2021.
6. The following is a list of selected account balances taken from the December 31, 2021, general ledger of Selecta Corp. Account Payable 50,000 Accounts Receivable 45,500 Ordinary Share Capital 126,000 Paid in Capital in Excess of Par –Ordinary Share Capital 110,500 Paid in Capital in Excess of Par – Preferred Share Capital 10,250 Preference Share Capital 58,000 Preference Share capital Subscribed 6,000 Retained Earnings 20,500 Subscription Receivable –Preference 10,500 Compute first for the total paid-in capital then proceed to total stockholder’s equity for Selecta Corp. On December 31, 2021.

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