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Dickinson Company has $12,060,000 million in assets. Currently half of these assets are financed with long-term debt at 10.3 percent and half with common

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Dickinson Company has $12,060,000 million in assets. Currently half of these assets are financed with long-term debt at 10.3 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 10.3 percent. The tax rate is 40 percent. Tax loss carryover provisions apply, so negative tax amounts are permissable. Under Plan D, a $3,015,000 million long-term bond would be sold at an interest rate of 12.3 percent and 376,875 shares of stock would be purchased in the market at $8 per share and retired. Under Plan E, 376,875 shares of stock would be sold at $8 per share and the $3,015,000 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. Current Plan Plan D Plan E Earnings per share b-1. Compute the earnings per share if return on assets fell to 5.15 percent. Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. Leave no cells blank be certain to enter O wherever required. Current Plan Plan D Plan E Earnings per share b-2. Which plan would be most favorable if return on assets fell to 5.15 percent? Consider the current plan and the two new plans. O Plan E O Current Plan O Plan D b-3. Compute the earnings per share if return on assets increased to 15.3 percent. Note: Round your answers to 2 decimal places. Earnings per share Current Plan Plan D Plan E

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