Based on the data in Exercise E8-1, discuss factors other than earnings per share that should be considered in evaluating such financing plans.

In Exercise E8-1

BSF Co., which produces and sells skiing equipment, is financed as follows:

Bonds payable, 8% (issued at face amount) ............................. $ 7,500,000

Preferred 2% stock, $10 par .................................................. 7,500,000

Common stock, $50 par ...................................................... 7,500,000

Income tax is estimated at 40% of income.