Two companies are financed as follows: Bonds payable, 4% issued at face Common stock, $25 par Income tax is estimated at 40% of income for both companies. Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $7,900,000 each. X Co. Earnings before interest and taxes Deduct interest on bonds Income before income tax Deduct income tax Net income 7900000 360000 7540000 3016000 4524000 Earnings per share on common stock 18.85 S X Co. $9,000,000 6,000,000 Y Co. Y Co. $7,000,000 4,000,000