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Folmar Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $960,000 $480,000 Issue preferred $1 stock,
Folmar Co. is considering the following alternative financing plans:
| Plan 1 | Plan 2 | |||
| Issue 10% bonds (at face value) | $960,000 | $480,000 | ||
| Issue preferred $1 stock, $10 par | 800,000 | |||
| Issue common stock, $5 par | 960,000 | 640,000 | ||
Income tax is estimated at 40% of income.
Determine the earnings per share on common stock, assuming income before bond interest and income tax is $672,000.
Enter answers in dollars and cents, rounding to the nearest cent.
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