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Alternative Financing Plans

Folmar Co. is considering the following alternative financing plans:

	Plan 1	Plan 2
Issue 10% bonds (at face value)	$1,200,000		$600,000
Issue preferred $1 stock, $10 par			1,000,000
Issue common stock, $5 par	1,200,000		800,000

Income tax is estimated at 40% of income.

Determine theearnings per share on common stock, assuming income beforebondinterest and income tax is $480,000.

Enter answers in dollars and cents, rounding to the nearest cent.

Plan 1	$Earnings per share on common stock
Plan 2	$Earnings per share on common stock