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Alternative Financing Plans Desmond Co. is considering the following alternative financing plans: ...

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Accounting

Alternative Financing Plans
Desmond Co. is considering the following alternative financing plans:
Plan 1 Plan 2
Issue 5% bonds (at face value) $3,000,000 $1,000,000
Issue preferred $1 stock, $20 par 3,000,000
Issue common stock, $10 par 3,000,0002,000,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming that income before bond interest and income tax is $400,000.
Enter answers in dollars and cents, rounding to two decimal places.
Plan 1 $fill in the blank 1
Earnings per share on common stock
Plan 2 $fill in the blank 2
Earnings per share on common stock

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