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Dickinson Company has $11,980,000 million in assets. Currently half of these assets are financed with long-term debt att 9.9 percent and half with common stock

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Dickinson Company has $11,980,000 million in assets. Currently half of these assets are financed with long-term debt att 9.9 percent and half with common stock having a par value of S8. Ms. Smith, 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 9.9 percent. The tax rate is 40 percent. Tax loss carryover provisions apply, so negative tax amounts are permissable. Under Plan D, a S2,995,000 million long-term bond would be sold at an interest rate of 11.9 percent and 374,375 shares of stock would be purchased in the market at $8 per share and retired Under Plan E, 374,375 shares of stock would be sold at $8 per share and the S2,995,000 in proceeds would be used to reduce long-term debt. a. How would each of these plans affect earnings per share? Consider the current plan and the two new plans. (Round your answers to 2 decimal places. Current Plan Plan D Plan E 0.48 Earnings per share b-1. Compute the earnings per share if return on assets fell to 4.95 percent. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Current Plan Plan D Plan E Earnings per share

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