1. Effect of Financing on Net income per share of common stock outstanding during a period.Earnings Per Share
2. Three different plans for financing an $80,000,000 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:

3. 		Plan 1		Plan 2		Plan 3
   9% Bonds		_		_		$40,000,000
   Preferred 5% stock, $25 par		_		$40,000,000		20,000,000
   Common stock, $20 par		$80,000,000		40,000,000		20,000,000
   	Total	$ 80,000,000		$ 80,000,000		$ 80,000,000

4. Required:
5. 1. Determine for each plan the earnings per share of common stock, assuming that the income before A form of an interest-bearing note used by corporations to borrow on a long-term basis.bond interest and income tax is $10,000,000. Enter answers in dollars and cents, rounding to the nearest whole cent.

6. 	The profitability ratio of net income available to common shareholders to the number of common shares outstanding.Earnings Per Share on Common Stock
   Plan 1	$
   Plan 2	$
   Plan 3	$

7. 2. Determine for each plan the earnings per share of common stock, assuming that the income before bond interest and income tax is $6,000,000. Enter answers in dollars and cents, rounding to the nearest whole cent.

8. 	Earnings Per Share on Common Stock
   Plan 1	$
   Plan 2	$
   Plan 3	$