Georgia Office Supplies recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 40%. The firm had 1,000 shares outstanding.

1) How much was the firm's taxable income, or earnings before taxes (EBT)?

EBT = $12,500 - $7,250 - $1,250 - (.075 x $8,000) = $3,400

2) What is the firms earnings per share (EPS), assuming a Dividend of $100?