P12–11 EPS calculations Southland Industries has $60,000 of 16% (annual interest)

bonds outstanding, 1,500 shares of preferred stock paying an annual dividend of

$5 per share, and 4,000 shares of common stock outstanding. Assuming that the firm has a 40% tax rate, compute earnings per share (EPS) for the following levels of EBIT:

a. $24,600

b. $30,600

c. $35,000