Three recent graduates of the computer science program at the University of Tasmania are forming a company which will write and distribute new application software for the iPhone. Initially, the corporation will operate in Tasmania. A small group of private investors in Hobart is interested in financing the start-up company and two financing plans have been put forth for consideration:

• The first (Plan A) is an all-ordinary-equity capital structure.$2.2million dollars would be raised by selling ordinary shares at $10 per share.

• The second (Plan B) would involve the use of financial leverage.$1.1 million dollars would be raised by selling bonds with an effective interest rate of 11.2% (per annum), and the remaining $1.1 million would be raised by selling ordinary shares at the $10 price per share. The use of financial leverage is considered to be a permanent part of the firm's capitalisation, so no fixed maturity date is needed for the analysis. A 30% tax rate deemed appropriate for the analysis.

Assuming Earnings Before Interest and Tax (EBIT) of $307,000, The Earning Per Share (EPS)

under Plan B would be:

$____( Round your answer to the nearest cent)