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    Compute the earnings per share

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    The High and Dry Boat Company has $120,000 of 15% bonds outstanding along with 2,000 shares of $2.50 (dividend) preferred stock and 3,000 shares of common stock. Assuming the firm has a 40% tax rate, compute the earnings per share (EPS) for the following levels of EBIT.

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    Solution Summary

    The solution computes the earnings per share (EPS) for the given levels of EBIT.