Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 20

Effect of financing on earnings per share
Domanico Co., which produces and sells biking equipment, is financed as follows:

Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $10,500,000, (b) $11,800,000, and (c) $13,000,000.