Alternative Financing Plans

Frey 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	1,440,000		960,000

Income tax is estimated at 40% of income.

Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $1,152,000.

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

Plan 1	$ Earnings per share on common stock
Plan 2	$ Earnings per share on common stock

Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 $1,440,000 Issue 10% bonds (at face value) Issue preferred $1 stock, $10 par Issue common stock, $5 par - $720,000 1,200,000 960,000 1,440,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $1,152,000. Enter answers in dollars and cents, rounding to two decimal places. Earnings per share on common stock Plan 1 Plan 2 $ $ Earnings per share on common stock