Three plans for financing a $28,500,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount and the income tax rate is estimated at 30%. 9% Bonds 6% Preferred Stock, $100 par Common Stock, $10 par Total Plan 1 Net income $28,500,000 $28,500,000 Earnings per share on common stock Plan 2 $ $14,250,000 $ 14,250,000 It is estimated that income before interest and taxes will be $7,125,000. $28,500,000 $14,250,000 Determine for each plan, the expected net income and the earnings per share on common stock. (Round earnings per share to 2 decimal places, e.g. 2.25.) Plan 1 Plan 3 7,125,000 $28,500,000 $ 7,125,000 Plan 2 $ $ Plan 3
Subject :- Accounting
Three plans for financing a $28,500,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount and the income tax rate is estimated at 30%. 9% Bonds 6%
![Three plans for financing a $28,500,000 corporation are under consideration by its organizers. Under each of the following plans, the
securities will be issued at their par or face amount and the income tax rate is estimated at 30%
9% Bonds
6% Preferred Stock, $100 par
Common Stock, $10 par
Total
Net income
Plan 1
Earnings per share on common
stock
$28,500,000
$28,500,000
Plan 2
$14,250,000
14,250,000
$28,500,000
It is estimated that income before interest and taxes will be $7.125,000.
Determine for each plan, the expected net income and the earnings per share on common stock. (Round earnings per share to 2
decimal places, e.g. 2.25.)
Plan 1
$14,250,000
7,125,000
7,125,000
$28,500,000
Plan 3
$
$
Plan 2
Plan 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7b6ce77-7d1f-42c7-90fc-6e082dc1db1b%2F005f283c-0204-46ca-b282-838d17ae1b2f%2Fi0tbp2x_processed.jpeg&w=3840&q=75)
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