Effect of Financing on Earnings Per Share

BSF Co., which produces and sells skiing equipment, is financed as follows:

Bonds payable, 10% (issued at face amount)	$1,600,000
Preferred 2% stock, $20 par	1,600,000
Common stock, $25 par	1,600,000

Income tax is estimated at 60% of income.

Round your answers to the nearest cent.

a. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is $640,000. $___ per share

b. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is $800,000. $___ per share

c. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is $960,000. $___ per share