Effect of Financing on Earnings per Share

~Rhett Co., which produces and sells biking equipment, is financed as follows:

Bonds Payable, 7.5% (issued @face amount) 30,000,000

Preferred $3 stock, $20 par 30,000,000

Common Stock, $20 par 30,000,000

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) $15,000,000, (b) $17,500,000, and (c) $20,000,000.

Enter answers in dollars and cents, rounding to the nearest whole cent.

a. Earnings per share on common stock= $

b. Earnings per share on common stock= $

c. Earnings per share on common stock= $