Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Issue 5%...

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Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Issue 5% bonds (at face value) $6,000,000 Issue preferred $1 stock, $20 par Issue common stock, $25 ar Plan 2 $2,000,000 6,000,000 6,000,000 4,000,000 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 $800,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Plan 2 $ Earnings per share on common stock Earnings per share on common stock Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Issue 5% bonds (at face value) $6,000,000 Issue preferred $1 stock, $20 par Issue common stock, $25 ar Plan 2 $2,000,000 6,000,000 6,000,000 4,000,000 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 $800,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Plan 2 $ Earnings per share on common stock Earnings per share on common stock

Answer rating: 100% (QA)

The earnings per share for both Plan 1 and Plan 2 is given below Plan 1 Plan 2 Income before Interes... View the full answer