Kelton Co., which produces and sells skiing equipment, is financed as follows:
Bonds payable, 8% (issued at face amount)....20,000,000
preferred $2 stock, $10 par....20,000,000
common stock, $25 par........20,000,000
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) $10,000,000, (b) $12,000,000, and (c) $14,000,000.
Enter answers in dollars and cents, rounding to the nearest whole cent.
a. Earnings per share on common stock $
b. Earnings per share on common stock $
c. Earnings per share on common stock $
Particularly, I'm not sure how to determine the number of outstanding shares.