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Two companies are financed as follows: X Co. Y Co. Bonds payable, 9% issued at face $5,000,000 / $3,000,000 Common stock, $20 par 3,000,000 /3,000,000 Income tax is estimated at 40% of income.

Two companies are financed as follows:

X Co. Y Co.

Bonds payable, 9% issued at face $5,000,000 / $3,000,000

Common stock, $20 par 3,000,000 /3,000,000

Income tax is estimated at 40% of income.

*Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $1,500,000 each.

Aug 17 2021 View more View Less

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