Effect of Financing on Earnings per Share
Miller Co., which produces and sells skiing equipment, is financed as follows:
Bonds payable, 10% (issued at face amount) $2,300,000
Preferred $1 stock, $10 par 2,300,000
Common stock, $25 par 2,300,000
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) $805,000, (b) $1,035,000, and (c) $1,265,000.
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 $