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.