Fly Co. is considering the following alternative financing plans: Income tax is estimated at 40% of income.Determine
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Fly Co. is considering the following alternative financing plans:
Income tax is estimated at 40% of income.Determine the earnings per share of common stock, assuming income before bond interest and income tax is $2,000,000.
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Plan 2 Plan 1 Issue 12% bonds (at face value) issue preferred $1.75 stock, $20 par Issue common stock, $20 par $5,000,000 8,000,000 S10,000,000 10,000,000 7,000,000
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Plan 1 Plan 2 Earnings before bond interest and income tax 2000000 2000000 Bond inter...View the full answer
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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