You are a new financial analyst for Acme Bank and Funeral Directors (they decided to diversify). Anyway you are looking at the following for a company you are considering for a loan. Sales = $650,000, their operating profit was $400,000, their interest expense = $35,000, the par value of their common stock was $20,000, the paid-in-capital in excess of par was $210,000 and they have 10,000 shares of common stock outstanding. Assume a 21% tax rate.
1) What was the price of a share of common stock when it was sold (assume no flotation costs and they only sold stock once)
2) If they had no preferred stock, what must have been their earnings per share?