Alternative Financing Plans

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

Plan $1$ Plan $2$

Issue $5\%$ bonds $($at face value$)$ $$3,000,000$ $$1,000,000$

Issue preferred $$1$ stock, $$20$ par $3,000,000$

Issue common stock, $$10$ par $3,000,0002,000,000$

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 $$400,000.$

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