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) $450,000 Preferred $1 stock, $10 par 450,000 Common stock, $25 par 450,000 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) $193,50o, (b) $238,500, and (c) $283,500. Enter answers in dollars and cents, rounding to two decimal places. a. Earnings per share on common stock b. Earnings per share on common stock C. Earnings per share on common stock 00
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) $450,000 Preferred $1 stock, $10 par 450,000 Common stock, $25 par 450,000 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) $193,50o, (b) $238,500, and (c) $283,500. Enter answers in dollars and cents, rounding to two decimal places. a. Earnings per share on common stock b. Earnings per share on common stock C. Earnings per share on common stock 00
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):** $450,000
- **Preferred $1 stock, $10 par:** $450,000
- **Common stock, $25 par:** $450,000
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) $193,500
- (b) $238,500
- (c) $283,500
### Instructions
**Enter answers in dollars and cents, rounding to two decimal places.**
- 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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