Question
Alternative Financing Plans Folmar Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $960,000 $480,000 Issue
Alternative Financing Plans Folmar Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $960,000 $480,000 Issue preferred $1 stock, $10 par 800,000 Issue common stock, $5 par 960,000 640,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming income before bond interest and income tax is $672,000. Enter answers in dollars and cents, rounding to the nearest cent. Plan 1 $ Earnings per share on common stock Plan 2 $ Earnings per share on common stock
Alternative Financing Plans Folmar Co. is considering the following alternative financing plans: Plan 2 $480,000 800,000 640,000 Plan 1 Issue 10% bonds (at face value) Issue preferred $1 stock, $10 par Issue common stock, $5 par Income tax is estimated at 40% of income. $960,000 960,000 Determine the earnings per share on common stock, assuming income before bond interest and income tax is $672,000 Enter answers in dollars and cents, rounding to the nearest cent. Plan 1 Plan 2 1.80Earnings per share on common stock Earnings per share on common stockStep by Step Solution
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