Homework Answers
| Plan One Issue Stock |
Plan Two Issue Bonds |
|
| Income before interest and tax | $813000 | $813000 |
| Less:Interest (2793000*15%) | 0 | (418950) |
| Income before tax | $813000 | $394050 |
| Less:Taxes @40% | (325200) | (157620) |
| Net income | $487800 | $236430 |
| No. Outstanding shares | 96500+57000 = 153500 | 96500 |
| Earning per share | $3.18 | $2.45 |
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