June Co. is considering the following alternative plans for financing the company: Issue 10% bonds (at face) Issue common stock, $10 par Plan I Plan I Plan II $3,000,000 $4,000,000 1,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000. Round your answers to two decimal places. Plan II 00

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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June Co. is considering the following alternative plans for financing the company:
Issue 10% bonds (at face)
Issue common stock, $10 par
Plan I
Plan I
Plan II
$3,000,000
$4,000,000
1,000,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000. Round your
answers to two decimal places.
Plan II
00
Transcribed Image Text:June Co. is considering the following alternative plans for financing the company: Issue 10% bonds (at face) Issue common stock, $10 par Plan I Plan I Plan II $3,000,000 $4,000,000 1,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000. Round your answers to two decimal places. Plan II 00
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