Question 27 Jackson Company is considering the following alternative financing plans: Plan 1 Plan 2 Issue 8% bonds at face value $2,000,000 $1,000,000 Issue preferred stock, $15 par 1,500,000 Issue common stock, $10 par 2,000,000 1,500,000 Income tax is estimated at 35% of income. Dividends of $2 per share were declared and paid on the preferred stock. Determine the earnings per share of common stock for PLAN 1, assuming income before bond interest and income tax is $650,000. 3.19 2.45 1.59 2.12