Interest versus dividend expenses Corporation expects earnings before interest and taxes to be

$ $52$ comma $000$$$52,000$

for the current period. Assuming a flat ordinary tax rate of

$21\%21\%,$

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

$ $11$ comma $200$$$11,200$

in interest.

b$.$ The firm pays

$ $11$ comma $200$$$11,200$

in preferred stock dividends.

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Part $1$

a$.$ Complete the fragment of Michaels Corporation's income statement below to compute the firm's earnings after taxes and earnings available for common stockholders under condition

$($a$).$

$($Round to the nearest dollar.$)$

EBIT $

Less: Interest expense

Earnings before taxes $

Less: Taxes $(21\%)$

Earnings after taxes $

Less: Preferred dividends

Earnings available for common stockholders $