Exercise 2. Dhofar Cattle feed Ltd expects that its earnings before interest and taxes (EBIT) in the current year would amount to RO 30000. The firm has 12% bonds aggregating RO 180000 while the 10%...

Extracted text: Exercise 2. Dhofar Cattle feed Ltd expects that its earnings before interest and taxes (EBIT) in the current year would amount to RO 30000. The firm has 12% bonds aggregating RO 180000 while the 10% preference shares amount to RO 80000. What would be the earnings per share (EPS)? Assuming the EBIT being i. RO 30,000, and ii. RO 24,000 ii. RO 32,000, how would the EPS be affected? The firm can be assumed to be in the 20% tax bracket. The number of outstanding Common Stock/Ordinary shares is 2000 Solution Exercise 2...tareeqa 1 ЕВIT I ЕBIT II ЕBIT III EARNINGS BEFORE INTEREST AND TAXES (EBIT) LESS INTEREST EARNING AFTER INTEREST BEFORE TAX (EAIBT) LESS TAXES (. %) EARNING AFTER TAXES (EAT) LESS PREFERENCE DIVIDEND EARNINGS AVAILABLE FOR COMMON STOCK HOLDERS No. OF COMMON STOCK HOLDERS EARNING PER SHARE