Alternative Financing Plans

Owen Co. is considering the following alternative financing plans:

	Plan 1		Plan 2
Issue 7% bonds (at face value)	$5,000,000		$3,400,000
Issue preferred $1 stock, $20 par			3,600,000
Issue common stock, $25 par	5,000,000		3,000,000

Income tax is estimated at 40% of income.

Determine the earnings per share of common stock, assuming income before bond interest and income tax is $750,000.

Enter answers in dollars and cents, rounding to the nearest whole cent.

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

Could you also explain how you get the answer.