In: Accounting
Effect of Financing on Earnings per Share
Domanico Co., which produces and sells biking equipment, is financed as follows:
Bonds payable, 10% (issued at face amount) | $1,400,000 |
Preferred $2 stock, $20 par | 1,400,000 |
Common stock, $25 par | 1,400,000 |
Income tax is estimated at 40% of income.
Determine the earnings per share on common stock, assuming that the income before bond interest and income tax is (a) $574,000, (b) $714,000, and (c) $854,000.
Enter answers in dollars and cents, rounding to the nearest cent.
a. Earnings per share on common stock $
b. Earnings per share on common stock $
c. Earnings per share on common stock $