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2 of 5 (3 complete) HW Score: 75.93%, 91.87 of 121 pts -20 (similar to)...

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Accounting

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2 of 5 (3 complete) HW Score: 75.93%, 91.87 of 121 pts -20 (similar to) Question Help 0 Electronics is considering two plans for raising $5,000,000 to expand operations. Plan A is to issue 9% bonds payable, and plan B is to issue 400.000 shares of mon stock. Before any new financing, RL Electronics has net income of $450,000 and 300,000 shares of common stock outstanding. Management believes the mpany can use the new funds to earn additional income of $900,000 before interest and taxes. The income tax rate is 20%. Analyze the RL Electronics situation to termine which plan will result in higher earnings per share. (Complete all answer boxes. Enter "O" for any zero balances. Round earnings per share amounts to the arest cent.) egin by completing the analysis below for plan A then plan B. Plan A: Issue $5,000,000 of 9% Bonds Payable Net income before new project Expected income on the new project before interest and income tax expenses Less: Interest expense Project Income before income tax Less: Income tax expense Project net income Net income with new project Earnings per share with new project

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