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Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
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Phoniex University
Oct-2001 - Nov-2016
Ex 12-1  Effect of financing on earnings per share                                                     ObJ. 1
Domanico Co., which produces and sells biking equipment, is financed as follows:
Bonds payable, 8% (issued at face  amount)                                                    $10,000,000
Preferred $5 stock, $10 par                                                                                           10,000,000
Common stock, $20 par                                                                                                   10,000,000
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) $10,500,000, (b) $11,800,000, and (c) $13,000,000.
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