Homework Answers
Earning per share= net income/number of shares
Calculation of earning per share are per Plan 1:
Earning after interest= EBIT-interest= 100000-(87000*0.07)=
100000-6090= 93910
Earning per share= 93910/27000= 3.48
Calculation of earning per share are per Plan II:
Earning after interest= EBIT-interest= 100000-(261000*0.07)=
100000-18270= 81730
Earning per share= 81730/21000= $3.89
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stuck on plan 2, for plan one i did: (but when i do that for plan...
stuck on plan 2, for plan one i did: (but when i do that for
plan 2 it is incorrect)
87,000 * 0.07 = 6,090
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stuck on plan 2, for plan one i did: (but when i do that for
plan 2 it is incorrect)
87,000 * 0.07 = 6,090
100,000 - 6,090 = 93,910
27,000 / 93,910 = 0.2875 *100 = 28.75
Bellwood Corp. is comparing two different capital structures. Plan I would result in 27,000 shares of stock and $87,000 in debt. Plan II would result in 21,000 shares of stock and $261,000 in debt. The interest rate on the debt is 7...
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