hree different plans for financing a $7,400,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount, ate is estimated at 40% of income. Plan 1 Plan 2 Plan 3 10% bonds $3,700,000 Preferred 10% stock, $100 par $3,700,000 1,850,000 - Common stock, $7.4 par $7,400,000 3,700,000 1,850,000 Total $7,400,000 $7,400,000 $7,400,000 Round the answers to nearest cent. Instructions: 1. Determine for each plan the earnings per share of common stock, assuming that the income before bond interest and income tax is $14,800,000.

hree different plans for financing a $7,400,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount, ate is estimated at 40% of income. Plan 1 Plan 2 Plan 3 10% bonds $3,700,000 Preferred 10% stock, $100 par $3,700,000 1,850,000 - Common stock, $7.4 par $7,400,000 3,700,000 1,850,000 Total $7,400,000 $7,400,000 $7,400,000 Round the answers to nearest cent. Instructions: 1. Determine for each plan the earnings per share of common stock, assuming that the income before bond interest and income tax is $14,800,000.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter8: Liabilities And Stockholders' Equity

Section: Chapter Questions

Problem 8.1.3P

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