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Brief Exercise 11-13 Larkspur, Inc. is considering these two alternatives to finance its construction of...

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Brief Exercise 11-13 Larkspur, Inc. is considering these two alternatives to finance its construction of a new $1.90 million plant: 1. 2. Issuance of 190,000 shares of common stock at the market price of $10 per share. Issuance of $1.90 million, 5% bonds at face value. Your answer is partially correct. Try again. Complete the table. (Round earnings per share to 2 decimal places, e.g. $2.66.) Income before interest and taxes Issue Stock $1,596,000 Issue Bonds $1,596,000 Interest expense from bonds 95,000 Income before income taxes 1596000 1501000 Income tax expense (30%) 478800 4503000 Net income 1117200 1050700 x Outstanding shares 190000 790,000 Earnings per share 5.68 5.53 x Your answer is incorrect. Try again, Indicate which alternative is preferable. > Issuance of bonds thes preferable

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