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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
PE 12-1b  Alternative financing plans
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Brower Co. is considering the following alternative financing   plans:
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SHOW ME HOW
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Plan 1Â Â Â Â Â Â Â Â Â Â Â Â Plan 2
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Issue 10% bonds (at face value)                                        $4,000,000                $2,500,000 Issue preferred $2.50 stock, $25 par                                                                                                                   —              3,000,000 Issue common stock, $10 par                                                                                                                 4,000,000                  2,500,000
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Income tax is estimated at 40% of  income.
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Determine the earnings per share of common stock, assuming income before bond interest and income tax is  $2,000,000.
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