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Domanico Co., which produces and sells biking equipment, is financed as follows: Bonds Payable, 8% (issued at face amount) 10,000,000 Preferred 5% stock , $10
Domanico Co., which produces and sells biking equipment, is financed as follows:
Bonds Payable, 8% (issued at face amount) 10,000,000
Preferred 5% stock , $10 par 10,000,000
Common stock, $20 par 10,000,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $10,500,000, (b) $11,800,000, and (c) $13,000,000.
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