Alternative Financing Plans

Desmond Co$.$ is considering the following alternative financing plans:

Plan $1$ Plan $2$

Issue $10\%$ bonds $($at face value$)$ $$1,440,000$ $$720,000$

Issue preferred $$1$ stock, $$10$ par $1,200,000$

Issue common stock, $$5$ par $1,440,000960,000$

Income tax is estimated at $40\%$ of income.

Determine the earnings per share of common stock, assuming that income before bond interest and income tax is $$720,000.$

Enter answers in dollars and cents, rounding to two decimal places.

Plan $1$ $fill in the blank $1$ Earnings per share on common stock

Plan $2$ $fill in the blank $2$ Earnings per share on common stock

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