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Earnings per share of common stock

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Reference no: EM131028709

Owen Co. is considering the following alternative financing plans:


 Plan 1 Plan 2
Issue 7% bonds (at face value) $5,000,000
$3,400,000
Issue preferred $1 stock, $20 par -
3,600,000
Issue common stock, $25 par 5,000,000
3,000,000

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 $750,000.

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

Reference no: EM131028709

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