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EPS calculations   Southland Industries has $ 70 comma 000$70,000 of 14.7 %14.7% ​(annual interest) bonds​ outstanding,...

EPS calculations   Southland Industries has $ 70 comma 000$70,000 of 14.7 %14.7% ​(annual interest) bonds​ outstanding, 1 comma 8001,800 shares of preferred stock paying an annual dividend of $ 5$5 per​ share, and 7 comma 0007,000 shares of common stock outstanding. Assuming that the firm has a 40 %40% tax​ rate, compute earnings per share​ (EPS) for the following levels of​ EBIT: a. $ 24 comma 400

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Answer #1
EBIT $             24,400
Less: Interest $             10,290 70000*14.7%
Profit before tax $             14,110
Tax @ 40% $               5,644
Net income $               8,466
Less: Preference dividends $               8,466 Limited to avaialble net income
Net income available to common stockholders $0.00
÷Number of shares                    7,000
EPS $0.00
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