Dickinson Company has $$11,900,000$ million in assets. Currently half of these assets are financed with long$-$term debt at $9\mathrm{.}5$ percent and half with common stock having a par value of $$8.$ Ms$.$ Park, Vice President of Finance, wishes to analyze two refinancing plans, one with more debt $($D$)$ and one with more equity $($E$).$ The company earns a return on assets before interest and taxes of $9\mathrm{.}5$ percent. The tax rate is $40$ percent. Tax loss carryover provisions apply, so negative tax amounts are permissable.

Under Plan D$,$ a $$2,975,000$ million long$-$term bond would be sold at an interest rate of $11\mathrm{.}5$ percent and $371,875$ shares of stock would be purchased in the market at $$8$ per share and retired.

Under Plan E$,371,875$ shares of stock would be sold at $$8$ per share and the $$2,975,000$ in proceeds would be used to reduce long$-$term debt.

a$.$ Compute earnings per share considering the current plan and the two new plansDickinson Company has $$11,900,000$ million in assets. Currently half of these assets are financed with long$-$term debt at $9\mathrm{.}5$ percent

and half with common stock having a par value of $$8.$ Ms$.$ Park, Vice President of Finance, wishes to analyze two refinancing plans,

one with more debt $($D$)$ and one with more equity $($E$).$ The company earns a return on assets before interest and taxes of $9\mathrm{.}5$ percent.

The tax rate is $40$ percent. Tax loss carryover provisions apply, so negative tax amounts are permissable.

Under Plan D$,$ a $$2,975,000$ million long$-$term bond would be sold at an interest rate of $11\mathrm{.}5$ percent and $371,875$ shares of stock would

be purchased in the market at $$8$ per share and retired.

Under Plan E$,371,875$ shares of stock would be sold at $$8$ per share and the $$2,975,000$ in proceeds would be used to reduce long$-$

term debt.

a$.$ Compute earnings per share considering the current plan and the two new plans.

Note: Round your answers to $2$ decimal places.