I cant seem to figure out how to determine the earnings per share on common stock?? Help please!! Alternative Financing PlansFrey Co. is considering the following alternative financing plans: Plan 1Plan 2Issue 10% bonds (at face value)$1,120,000 $560,000 Issue preferred $1 stock, $10 par— 930,000 Issue common stock, $5 par1,120,000 750,000 Income tax is estimated at 40% of income.Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $896,000.Enter answers in dollars and cents, rounding to the nearest cent.

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Description: I cant seem to figure out how to determine the earnings per share on common stock?? Help please!! Alternative Financing PlansFrey Co. is considering the following alternative financing plans: Plan 1Plan 2Issue 10% bonds (at face value)$1,120,000 $560

For calculating earning per share for common stock , we need to deduct interest on bonds first ,…

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Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 1PEB: Brower Co. is considering the following alternative financing plans: Income tax is estimated at 40%...

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I cant seem to figure out how to determine the earnings per share on common stock?? Help please!!

Alternative Financing Plans

Frey Co. is considering the following alternative financing plans:

	Plan 1	Plan 2
Issue 10% bonds (at face value)	$1,120,000		$560,000
Issue preferred $1 stock, $10 par	—		930,000
Issue common stock, $5 par	1,120,000		750,000

Income tax is estimated at 40% of income.

Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $896,000.

Enter answers in dollars and cents, rounding to the nearest cent.

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