Effect of Financing on Earnings per Share Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 10% (issued at face amount) Preferred $2 stock, $20 par Common stock, $25 par Income tax is estimated at 40% of income. $1,300,000 1,300,000 1,300,000 Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $585,000, (b) $715,000, and (c) $845,000.
Effect of Financing on Earnings per Share Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 10% (issued at face amount) Preferred $2 stock, $20 par Common stock, $25 par Income tax is estimated at 40% of income. $1,300,000 1,300,000 1,300,000 Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $585,000, (b) $715,000, and (c) $845,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Effect of Financing on Earnings per Share
Henriksen Co., which produces and sells biking equipment, is financed as follows:
Bonds payable, 10% (issued at face amount)
Preferred $2 stock, $20 par
Common stock, $25 par
Income tax is estimated at 40% of income.
$1,300,000
1,300,000
1,300,000
Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $585,000, (b) $715,000, and (c) $845,000.
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