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)||$2,000,000|
|Preferred $2 stock, $20 par||2,000,000|
|Common stock, $25 par||2,000,000|
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) $840,000, (b) $1,040,000, and (c) $1,240,000.
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 $