Sterling Optical and Royal Optical both make glass frames and each is able to generate earnings...

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Sterling Optical and Royal Optical both make glass frames and each is able to generate earnings before interest and taxes of b. In part a, you should have gotten the same answer for both companies earnings per share. Assuming a P/E ratio of 22 for e

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Answer 1

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a) Sterling $ $ EPS 0.45 =(132000-660000*12%)*(1-25%)/88000 0.45 =(132000-220000*12%)*(1-25%)/176000 Royal b) Stock price $ 9

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Sterling Optical and Royal Optical both make glass frames and each is able to generate earnings...

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