Alternative Financing Plans

Folmar Co. is considering the following alternative financing plans:

	Plan 1		Plan 2
Issue 10% bonds (at face value)	$1,280,000		$640,000
Issue preferred $1 stock, $10 par			1,060,000
Issue common stock, $5 par	1,280,000		860,000

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 $640,000.

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