Lawn Care Ace Hardware 250 120 9 26 Pre-tax income ($ million) Annual common dividends paid ($ million) Annual preferred

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Lawn Care Ace Hardware 250 120 9 26 Pre Tax Income Million Annual Common Dividends Paid Million Annual Preferred 1 (88.9 KiB) Viewed 42 times

Analysts forecasts also reveal that the earnings of Lawn Care
and Ace Hardware are expectedto grow next year by 15% and 50%,
respectively.Corporate income tax is 20%.
Required:
Analyze the following to evaluate the two companies’relative
performance.For (1) below,express your answers as percentages with
three decimal places; for (2) and (3) below, keepyour answers with
two decimal places.
a) Calculate the dividend yield for each company.
b) Calculate the earnings per share (EPS) for each company.
c) Explain what a price-earnings (P/E) ratio typically measures and
calculate the P/E ratio for each company.
d) Based on your analysis above，which company would you recommend
for investing purpose? Why?
Lawn Care Ace Hardware 250 120 9 26 Pre-tax income ($ million) Annual common dividends paid ($ million) Annual preferred dividends paid ($ million) Number of common shares outstanding (millions) Current market price per share ($) 12 18 10 13 75 55