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Determine the earnings per share on common stock

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Reference no: EM131769008

Folmar Co. is considering the following alternative financing plans:

Plan 1 Plan 2

Issue 10% bonds (at face value) $2,000,000 $1,000,000
Issue preferred $1 stock, $10 par - 1,660,000
Issue common stock, $5 par 2,000,000 1,340,000
Income tax is estimated at 40% of income.

Determine the earnings per share on common stock, assuming income before bond interest and income tax is $800,000.

Enter answers in dollars and cents, rounding to the nearest cent.

Plan 1 Earnings per share on common stock
Plan 2 Earnings per share on common stock

Reference no: EM131769008

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