Solution-Determine the earnings per share of common stock

Determine the earnings per share of common stock

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Reference no: EM13534142

A Alternative financing plans Baker Co. is considering the following alternative financing plans:

	Plan 1	Plan 2
Issue 5% bonds (at face value)	$3,000,000	$1,500,000
Issue preferred $4 stock, $25 par	-	2,500,000
Issue common stock, $40 par	3,000,000	2,000,000

Income tax is estimated at 40% of income.

Determine the earnings per share of common stock, assuming income before bond interest and income tax is $1,000,000.

Reference no: EM13534142

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Determine the earnings per share of common stock

Reference no: EM13534142

Reference no: EM13534142

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