Data for Huckadee Corporation:

1. Earnings before interest and taxes are $440,000.

2. The tax rate is 40%.

3. All bonds or stocks are issued at their par or face value.

	Plan I	Plan II	Plan III
Earnings Before bond interest and income tax	$440,000	$440,000	$440,000
Bond interest expense
Income before taxes
Income tax
Net income
Dividends on preferred stock
Earnings available for common stock
Number of common shares
Earnings per share on common stock

Effect of Alternative Financing Plans Plan 1 Plan 2 Plan 3 Amount Percent Amount Percent Amount Percent Issue 12% bonds 0% 0% $2,000,000 50% Issue 9% preferred stock, $50 par value 0 $2,000,000 50 1,000,000 25 Issue common stock, $10 par value $4,000,000 100 2,000,000 50 1,000,000 25 Total amount of financing $4,000,000 100% $4,000,000 100% $4,000,000 100%