Sterling optical and Royal Optical both make glass frames and each is able to generate earnings before interest and taxes of $120,000.Debt @12% $600,000 Debt @12% $200,000, Common stock, $5 par 400,000 Common stock, $5 par 800,000,Total 1,000,000 Total 1,000,000,Common shares 80,000 Common shares 160,000, Compute earnings per share for both firms. Assume a 25 percent tax
2 answers
$0.45 for each company
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