Effect of financing on earnings per share OBJ. 1 Domanico Co., which produces and sells biking equipment, is financed as follows:

Bonds payable, 8% (issued at face amount) $10,000,000 Preferred $5 stock, $10 par 10,000,000 Common stock, $20 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) $10,500,000,

(b) $11,800,000, and

(c) $13,000,000.