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Part 1

EPS calculations Southland Industries has

$55,000

of

15.9%

(annual interest) bonds outstanding,

1,800

shares of preferred stock paying an annual dividend of

$4

per share, and

6,000

shares of common stock outstanding. Assuming that the firm has a

40%

tax rate, compute earnings per share (EPS) for the following levels of EBIT:

a. $24,700

b. $30,000

c. $35,600

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Part 1

a. Compute earnings per share (EPS) for EBIT of

$24,700.

Calculate the EPS below: (Round to the nearest dollar except for the EPS which should be rounded to three decimal places.)

EBIT	$
Less: Interest
Net profits before taxes	$
Less: Taxes
Net profit after taxes	$
Less: Preferred dividends
Earnings available to common shareholders	$
EPS	$

Part 2

b. Compute earnings per share (EPS) for EBIT of

$30,000.

Calculate the EPS below:(Round to the nearest dollar except for the EPS which should be rounded to three decimal places.)

EBIT	$
Less: Interest
Net profits before taxes	$
Less: Taxes
Net profit after taxes	$
Less: Preferred dividends
Earnings available to common shareholders	$
EPS	$

Part 3

c. Compute earnings per share (EPS) for EBIT of

$35,600.

Calculate the EPS below: (Round to the nearest dollar except for the EPS which should be rounded to three decimal places.)

EBIT	$
Less: Interest
Net profits before taxes	$
Less: Taxes
Net profit after taxes	$
Less: Preferred dividends
Earnings available to common shareholders	$
EPS	$