=+LG 2 P13–11 EPS calculations Maitland Enterprises has $70,000 of 10% (annual interest) bonds outstanding, 500 shares of preferred stock paying an annual dividend of $45 per share, and 6,000 shares of common stock outstanding. Maitland Enterprises is taxed at 40%. Calculate the earnings per share (EPS) when EBIT is:

a. $130,000

b. $95,000

c. $73,800 LG 2 P13–12 Degree of financial leverage The Plastic Corporation has a current capital structure consisting of $150,000 of 15% debt and 3,500 shares of common stock. The tax rate is 40%.