Frey Co. is considering the following alternative financing plans:

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 $800,000.
Enter answers in dollars and cents, rounding to the nearest whole cent.
Plan 1 $ Earnings per share on common stock
Plan 2 $ Earnings per share on common stock?

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Plan 1 Plan 2 Issue 5% bonds (at face value) $6,000,000 $2,000,000 Issue preferred $1 stock, $20 par 6,000,000 Issue common stock, $25 par 6,000,000 4,000,000