Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2...
Alternative Financing Plans
Frey Co. is considering the following alternative financing plans:
| Plan 1 | Plan 2 | |||
| Issue 10% bonds (at face value) | $1,120,000 | $560,000 | ||
| Issue preferred $1 stock, $10 par | — | 930,000 | ||
| Issue common stock, $5 par | 1,120,000 | 750,000 | ||
Income tax is estimated at 40% of income.
Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $896,000.
Enter answers in dollars and cents, rounding to two decimal places.
| Plan 1 | $ Earnings per share on common stock |
| Plan 2 | $ Earnings per share on common stock |
Homework Answers
Calculate earning per share
| Plan 1 | Plan 2 | |
| Income before interest and tax | 896000 | 896000 |
| Less: Interest expense | -112000 | -56000 |
| Income before tax | 784000 | 840000 |
| Income tax | -313600 | -336000 |
| Net income | 470400 | 504000 |
| Preferred dividend | 0 | -93000 |
| Income available for equity shareholders | 470400 | 411000 |
| Share outstanding | 224000 | 150000 |
| EPS | 2.10 | 2.74 |
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Alternative Financing Plans
Frey Co. is considering the following alternative financing
plans:
Plan 1
Plan 2...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 $1,080,000 Issue 10% bonds (at face value) Issue preferred $1 stock, $10 par Issue common stock, $5 par $540,000 900,000 720,000 1,080,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $324,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $1,040,000 $520,000 Issue preferred $1 stock, $10 par — 860,000 Issue common stock, $5 par 1,040,000 700,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $312,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 $...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $1,080,000 $540,000 Issue preferred $1 stock, $10 par- 900,000 Issue common stock, $5 par 1,080,000 720,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $432,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 $ Earnings...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $1,080,000 $540,000 Issue preferred $1 stock, $10 par — 900,000 Issue common stock, $5 par 1,080,000 720,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $756,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 $...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $1,320,000 $660,000 Issue preferred $1 stock, $10 par 1,100,000 Issue common stock, $5 par 1,320,000 880,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $792,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 $960,000 Issue 10% bonds (at face value) Issue preferred $1 stock, $10 par $480,000 800,000 Issue common stock, $5 par 960,000 640,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $672,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per...
ke: Practice! Alternative financing riaus Alternative Financing Plans Frey Co. is considering the following alternative financing...
ke: Practice! Alternative financing riaus Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 $960,000 Issue 10% bonds (at face value) Plan 2 $480,000 800,000 Issue preferred $1 stock, $10 par Issue common stock, $5 par 960,000 640,000 Income tax is estimated at 40% of income. Determine the earnings per Share on common stock, assuming that income before bond interest and income tax is $384,000 Enter answers in dollars and cents, rounding to two decimal...
NUM Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 2 Issue...
NUM Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 2 Issue 10% bonds (at face value) $800,000 $400,000 Issue preferred $1 stock, $10 par 660,000 540,000 Issue common stock, $5 par 800,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $240,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per share...
1. PE.14-01.ALGO Alternative Financing Plans Frey Co. is considering the following alternative financing plans: 2. PE.14-02.ALGO...
1. PE.14-01.ALGO Alternative Financing Plans Frey Co. is considering the following alternative financing plans: 2. PE.14-02.ALGO Plan 1 Plan 2 3. PE.14-03.ALGO 4. PE.14-04.ALGO 5. PE.14-05.ALGO 6. PE.14-06.ALGO 7. PE.14-07.ALGO 8. PE.14-08.ALGO 9. PE.14-09.ALGO Issue 10% bonds (at face value) $1,080,000 $540,000 Issue preferred $1 stock, $10 par 900,000 Issue common stock, $5 par 1,080,000 720,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income...
еВook Show Me How Calculator Print Item Alternative Financing Plans Frey Co. is considering the following...
еВook Show Me How Calculator Print Item Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 2 Plan 1 $1,240,000 Issue 10% bonds (at face value) $620,000 Issue preferred $1 stock, $10 par 1,030,000 Issue common stock, $5 par 830,000 1,240,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $372,000. Enter answers in dollars and cents, rounding to...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 $1,080,000 Issue 10% bonds (at face value) Issue preferred $1 stock, $10 par Issue common stock, $5 par $540,000 900,000 720,000 1,080,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $324,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $1,080,000 $540,000 Issue preferred $1 stock, $10 par- 900,000 Issue common stock, $5 par 1,080,000 720,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $432,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 $ Earnings...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 10% bonds (at face value) $1,320,000 $660,000 Issue preferred $1 stock, $10 par 1,100,000 Issue common stock, $5 par 1,320,000 880,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $792,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per...
Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 Plan 2 $960,000 Issue 10% bonds (at face value) Issue preferred $1 stock, $10 par $480,000 800,000 Issue common stock, $5 par 960,000 640,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $672,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per...
ke: Practice! Alternative financing riaus Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 1 $960,000 Issue 10% bonds (at face value) Plan 2 $480,000 800,000 Issue preferred $1 stock, $10 par Issue common stock, $5 par 960,000 640,000 Income tax is estimated at 40% of income. Determine the earnings per Share on common stock, assuming that income before bond interest and income tax is $384,000 Enter answers in dollars and cents, rounding to two decimal...
NUM Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 2 Issue 10% bonds (at face value) $800,000 $400,000 Issue preferred $1 stock, $10 par 660,000 540,000 Issue common stock, $5 par 800,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $240,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 Earnings per share...
1. PE.14-01.ALGO Alternative Financing Plans Frey Co. is considering the following alternative financing plans: 2. PE.14-02.ALGO Plan 1 Plan 2 3. PE.14-03.ALGO 4. PE.14-04.ALGO 5. PE.14-05.ALGO 6. PE.14-06.ALGO 7. PE.14-07.ALGO 8. PE.14-08.ALGO 9. PE.14-09.ALGO Issue 10% bonds (at face value) $1,080,000 $540,000 Issue preferred $1 stock, $10 par 900,000 Issue common stock, $5 par 1,080,000 720,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income...
еВook Show Me How Calculator Print Item Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 2 Plan 1 $1,240,000 Issue 10% bonds (at face value) $620,000 Issue preferred $1 stock, $10 par 1,030,000 Issue common stock, $5 par 830,000 1,240,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $372,000. Enter answers in dollars and cents, rounding to...
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