eBook Print Item Effect of Financing on Earnings Per Share Three different plans for financing an $18,000,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount, and the income tax rate is estimated at 40% of income: 8% Bonds Preferred 4% stock, $20 par Common stock, $10 par Total Plan 1 Plan 2 Plan 3 $9,000,000 4,500,000 $18,000,000 $9,000,000 9,000,000 4,500,000 $ 18,000,000 $ 18,000,000 $ 18,000,000 Required: 1. Determine the earnings per share of common stock for each plan, assuming that the income before bond interest and income tax is $2,100,000. Enter answers in dollars and cents, rounding to the nearest whole cent. Earnings Per Share on Common Stock Plan 1 $ Plan 2 Plan 3 2. Determine the earnings per share of common stock for each plan, assuming that the income before bond interest and income tax is $1,050,000. Enter answers in dollars and cents, rounding to the nearest whole cent. Plan 1 Plan 2 Earnings Per Share on Common Stock Check My Work 1 more Check My Work uses remaining. Previous Next