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Question Content Area Two companies are financed as follows:   X Co. Y Co. Bonds payable, 9% issued at face $5,000,000 $3,000,000 Common stock, $25 par   3,000,000   3,000,000   Income tax is estimated at 40% of income for both companies. Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $2,280,000 each. Round your answers to two decimal places.   Earnings per Shareon Common Stock X Co. $fill in the blank 1 Y Co. $fill in the blank 2

Question Content Area Two companies are financed as follows:   X Co. Y Co. Bonds payable, 9% issued at face $5,000,000 $3,000,000 Common stock, $25 par   3,000,000   3,000,000   Income tax is estimated at 40% of income for both companies. Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $2,280,000 each. Round your answers to two decimal places.   Earnings per Shareon Common Stock X Co. $fill in the blank 1 Y Co. $fill in the blank 2

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 1PEB: Brower Co. is considering the following alternative financing plans: Income tax is estimated at 40%...
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  1. Question Content Area

    Two companies are financed as follows:

     
    X Co.
    Y Co.
    Bonds payable, 9% issued at face
    $5,000,000
    $3,000,000
    Common stock, $25 par
      3,000,000
      3,000,000

     

    Income tax is estimated at 40% of income for both companies.

    Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $2,280,000 each. Round your answers to two decimal places.

      Earnings per Share
    on Common Stock
    X Co. $fill in the blank 1
    Y Co.

    $fill in the blank 2

     
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