Google Sheet #9: Financing effects on earnings per share Three different plans for financing an $18,000,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at face value or par value. The income tax rate is 40% of income: Plan 1 Plan 2 Plan 3 8% Bonds $9,000,000 Preferred 4% stock, $20 par $9,000,000 $4,500,000 Common stock, $10 par $18,000,000 $9,000,000 $4,500,000 Total $18,000,000 $18,000,000 $18,000,000 1. Determine the earnings per share of common stock for each plan, assuming the income before bond interest and income tax is $2,100,000. 2. Determine the earnings per share of common stock for each plan, assuming the income before bond interest and income tax is $1,050,000. 3. Discuss which plan should be chosen in each scenario and why. Earnings per Share of Common Stock Plan 1 Plan 2 Plan 3 Earnings before bond interest and income tax Bond interest Income before income tax Income tax Net Income Dividends on preferred stock Earnings available for common stock Shares of common stock outstanding Earnings per share on common stock 2. Earnings per Share of Common Stock Fran 1 Plan 2 Plan 3 Earnings before bond interest and income tax Bond Interest Income before income tax Income tax Net income Dividends on preferred stock Earnings available for common stock Shares of common stock outstanding Earnings per share on common stock 3. (Key essay answer here)