a. $24,600b. $30,600c. $35,000Interest rate6%Bond value$60,000Interest paid$3,600Preferred dividend per share$5No. of preferred shares1500Total preferred dividend paid$7,500Tax rate40%No of outtanding equity shares4000aEBIT$24,600Net income before tax$13,500Net income after tax$8,100EPS$2.025bEBIT$30,600Net income before tax$19,500Net income after tax$11,700EPS$2.925cEBIT$35,000P13–11EPScalculationsSouthlandIndustries has $60,000 of6% (annual interest) bondsoutstanding, 1,500 sharesof preferred stock paying anannual dividend of $5 pershare, and 4,000 shares ofcommon stock outstanding.Assuming that the firm hasa 40% tax rate, computeearnings per share (EPS)for the following levels ofEBIT: