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 10% bonds (at face value) | $920,000 | $460,000 | ||
| Issue preferred $1 stock, $10 par | 760,000 | |||
| Issue common stock, $5 par | 920,000 | 620,000 | ||
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 $276,000.
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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