Effect of Financing on Earnings per Share ~Rhett Co., which produces and sells biking equipment,...
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Effect of Financing on Earnings per Share ~Rhett Co., which produces and sells biking equipment, is financed as follows: Bonds Payable, 7.5% (issued @face amount) 30,000,000
Preferred $3 stock, $20 par 30,000,000
Common Stock, $20 par 30,000,000
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) $15,000,000, (b) $17,500,000, and (c) $20,000,000.
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= $
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