Income before bond interest

Reference no: EM13148626

Miller Co., which produces and sells skiing equipment, is financed as follows: Bonds payable, 10% (issued at face amount) $10,000,000, Preferred 10% stock, $10 par 10,000,000, Common stock, $25 par, 10,000,000.

Income tax is estimated at 40% of income.

Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is

(a)$3,000,000,

(b)4,000,000, and

(c)$5,000,000.

Reference no: EM13148626

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