Question Content Area Two companies are financed as follows: X Co. Y Co. Bonds payable, 9% issued at face $5,000,000 $3,000,000 Common stock, $25 par 3,000,000 3,000,000 Income tax is estimated at 40% of income for both companies. Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $2,280,000 each. Round your answers to two decimal places. Earnings per Shareon Common Stock X Co. $fill in the blank 1 Y Co. $fill in the blank 2
Question Content Area Two companies are financed as follows: X Co. Y Co. Bonds payable, 9% issued at face $5,000,000 $3,000,000 Common stock, $25 par 3,000,000 3,000,000 Income tax is estimated at 40% of income for both companies. Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $2,280,000 each. Round your answers to two decimal places. Earnings per Shareon Common Stock X Co. $fill in the blank 1 Y Co. $fill in the blank 2
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 1P
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Question Content Area
Two companies are financed as follows:
X Co.Y Co.Bonds payable, 9% issued at face $5,000,000$3,000,000Common stock, $25 par 3,000,0003,000,000Income tax is estimated at 40% of income for both companies.
Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $2,280,000 each. Round your answers to two decimal places.
Earnings per Share
on Common StockX Co. $fill in the blank 1 Y Co. $fill in the blank 2
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