The company expects this expansion will require an additional $1,000,000 of capital and generate an additional $600,000 of after-tax profit. The options are: 1) Issuing an additional $1,000,000 of 10%, 100-par convertible preferred stock (same class as is currently outstanding) 2) Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue) 3) $500,000 each of preferred stock and bonds Determine the impact on earnings per share for each option.

Current:

Preferred Stock - (10,000 authorized, 500,000.00 5,000 issued, 10%, $100 par value) Common Stock - (2,000,000 shares 1,750,000.00 authorized, 1,750,000 issued, $1 par) Retained Earnings 9,418,540.46