Reference no: EM132463434
Alternative Financing Plans
Frey Co. is considering the following alternative financing plans:
Plan 1Plan 2Issue 10% bonds (at face value)$1,320,000 $660,000 Issue preferred $1 stock, $10 par- 1,100,000 Issue common stock, $5 par1,320,000 880,000
Income tax is estimated at 40% of income.
Question 1: Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $924,000.
- Enter answers in dollars and cents, rounding to two decimal places.
Plan 1 (??) Earnings per share on common stock
Plan 2 (2.30) Earnings per share on common stock
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: Prepare and Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $924,00
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