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14-1 Effect of financing on earnings per share EX1 OBJ. 1 Domanico Co., which produces...

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Accounting

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14-1 Effect of financing on earnings per share EX1 OBJ. 1 Domanico Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 6% (issued at face amount) Preferred $2.00 stock, $100 par Common stock, $25 par $5,000,000 5,000,000 5,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $600,000, (b) $800,000, and (c) $1,200,000

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