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Sorenson Co. is considering the following alternative plans for financing the company: Issue 10% Bonds (at face) Issue $10 par Common Stock Income tax

 

Sorenson Co. is considering the following alternative plans for financing the company: Issue 10% Bonds (at face) Issue $10 par Common Stock Income tax is estimated at 40% of income. 0 Plan 1 Plan 1 Plan 2 $60,000 Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $15,000. Round your answers to two decimal places. Plan 2 $40,000 $20,000

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