Top management of Crane company is considering two alternative capital structures for $2027.$ The first $($the $"$no debt" structure$)$

would be to have $$1,020,000$ in assets and $$1,020,000$ in stockholders' equity, with $39,000$ shares outstanding the entire year. This is

the structure the company had on December $31,2026.$ Alternatively, on January $1,2027,$ the company could issue $$370,000$ in debt

at $6\%$ interest $($the "with debt" structure$)$ and immediately use the proceeds to repurchase $19,500$ shares of stock for $$390,000.$ The

expected amount of net income $($ignoring taxes$),$ prior to any interest costs, is $$102,000$ for $2027.$

Assume the company pays dividends on common stock equal to its net income each year. Also, assume the accrued interest on the

debt was paid at December $31,2027,$ and the company has no other debt outstanding at year$-$end.

Also, assume the company has $$1,020,000$ in assets at both the beginning and the end of $2027.$

$($a$)$

Your answer is correct.

Compute the company's net income and earnings per share under both structures. $($Ignore income taxes in your computations.$)$

$($Round earnings per share to $2$ decimal places, e$.$g$.2\mathrm{.}66.)$

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$($b$)$

Compute the company's return on common stockholders' equity and return on assets under both structures. $($Round answers to $2$

decimal places, e$.$g$.2\mathrm{.}66\%.)$