Interest versus dividend expense Derwent Ltd. has announced that the earnings before income and taxes is going to be £300,000 for the current year. Assuming corporate tax rate for Derwent Ltd. is a flat 30%, compute the firm’s profit after taxes and earnings available for common stockholders (earnings after taxes and preferred stock dividends, if any) under following conditions:

a. The firm pays £70,000 in interest.

b. The firm pays £70,000 in preferred stock dividends.