mr gold is in the widget businesd. He currently sells 1 million
widgets a year at $5 each. His variable cost to produce the widgets is
$3 per unit, and he has $1,500,000 in fixed cost. His sales-to-assets
ratio is five times, and 40 percent of his assets are financed with 8
percnet debt, with the balance financed by common stock at $10 per
share. The tax rate is 40 percent.

Compute earnings per share

I HAVE TO HAVE THE ANSWER BEFORE 4:PM TODAY!!!!!!!

Shemrob ?

Sales = $5,000,000

Assets (at 5:1) = $1,000,000

Bonds  (40%) = $400,000
Stock = $600,000 = 60,000 shares

Contribution margin (at $2 per widget) = $2,000,000
Fixed cost = $1,500,000

EARNINGS BEFORE INTEREST + TAXES (EBIT) = $500,000

Bond payments (8%) = $32,000
Taxes = ($500,000 - $32,000) * 0.40 = $187,200

NET INCOME = $280,800

EARNINGS PER SHARE = $280,800/60,000 shares = $4.68


If any part of this step-by-step calculation is unclear, please
request a clarification and I'll explain it in more detail.

Best regards,

Omnivorous-GA

Thank you please see next question--i need it before 5pm today