Michaels Ltd expects earnings before interest and taxes to be $40 000 for this period. Assuming an ordinary tax rate of 30%, calculate the firms earnings after taxes and earnings available for ordinary shareholders (earnings after taxes and preference share dividends, if any) under the following conditions: a The firm pays $10 000 in interest. b The firm pays $10 000 in preference share dividends.

expects to be $40,000

tax rate 30%>calculate firms EPS & EPA (earnings after taxes and preference share dividends)

scenario 1: the firm pays 10,000 in interest

scenario 2: the firm pays 10,000 in preference share dividends