Brief Exercise 15-10 Blossom Inc. is considering two alternatives to finance its construction of a...
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Brief Exercise 15-10 Blossom Inc. is considering two alternatives to finance its construction of a new $2.00 million plant. (a) Issuance of 200,000 shares of common stock at the market price of $10 per share (b) Issuance of $2,000,000,8% bonds at face value. Complete the following table. (Round earnings per share to 2 decimal places, e.g. 0.25.) Issue Stock Issue Bond Income before interest and taxes 5710,000 $710,000 Interest expense Income before income taxes Income tax expense (409) Net income Outstanding shares 510.000 Earnings per share Indicate which alternative preferable Net income is that are outstanding if stock is used. However, warnings per shares than earnings por share if bonds are used because of the additional shares of stock
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