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%
$
140,000
Debt @ 10%
$
280,000
Common stock, $10 par
280,000
Common stock, $10 par
140,000
Total
$
420,000
Total
$
420,000
Common shares
28,000
Common shares
14,000
a. Complete the following table given earnings
before interest and taxes of $18,000, $42,000, and $59,000. Assume
the tax rate...