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Interest versus dividend expenseMichaels Corporation expects earnings before interest and taxes to be $49,000 for this period. Assuming an ordinary tax rate of 35%, compute

Interest versus dividend expenseMichaels Corporation expects earnings before interest and taxes to be $49,000 for this period. Assuming an ordinary tax rate of 35%, compute the firm's earnings after taxes and earnings available for common stockholders (earnings after taxes and preferred stock dividends, if any) under the following conditions: a. The firm pays $11,000 in interest. b. The firm pays $11,000 in preferred stock dividends.

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