Financing alternatives The Howe Computer Company has growthrapidly during the past 5 years. Recently, its commercial bankurged the company to consider increasing its permanent financing.Its bank loan under a line of credit has risen to $170,000,carrying a 11% interest rate, and Howe has been 30 to 60 days latein paying trade creditors. Discussions with an investment bankerhave resulted in the decision to raise $220,000, at this time.Investment bankers have assured Howe that the followingalternatives are feasible (flotation costs will be ignored):Alternative 1: Sell common stock at $10 per share. Alternative 2:Sell convertible bonds at a 11% coupon, convertible into 70 sharesof common stock for each $1000 bond (i.e., the conversion price is$14.29 per share). Alternative 3: Sell debentures with a 11%coupon; each $1000 bond will have 70 warrants to buy 1 share ofcommon stock at $14.29. Keith Howe, the president, owns 75% ofHowe's common stock and wants to maintain control of the company;45,000 shares are outstanding. The following are summaries ofHowe's latest financial statements: Balance sheet Currentliabilities $215,000 Common stock, $1 par 45,000 Retained earnings$25,000 Total assets $285,000 Total liabilities and equity $285,000Income Statement Sales $520,000 All costs except Interest 462,800EBIT $57,200 Interest $13,000 EBT $44,200 Taxes $17,680 Net income$26,520 Shares outstanding 45,000 Earnings per share $0.59Price/earnings ratio 20 Market price of stock $11.79 Show the newbalance sheet under each alternative. For alternative 2 and 3, showthe balance sheet after conversion of the debentures or exercise ofthe warrants. Assume that $170,000, of the funds raised will beused to pay off the bank loan and the rest used to increase totalassets. Round your answers to the nearest dollar. Total assets forAlternative 1 $ 334996 Total assets for Alternative 2 $ Totalassets for Alternative 3 $ Show Keith Howe's control position underof each alternative, assuming that the does not purchase additionalshares. Round your answers to the whole number. Original Plan 1Plan 2 Plan 3 Percent ownership 75% % % % What is the affect onearnings per share of each alternative if it is assumed thatearnings before interest and taxes will be 21% of total assets?Round your answers to the nearest cent. Original Plan 1 Plan 2 Plan3 Earnings per share $0.59 $ $ $ What will be the debt ratio undereach alternative? Round your answers to the whole number. OriginalPlan 1 Plan 2 Plan 3 Debt/assets ratio 75% % % % Which of the threealternatives would you recommend to Keith Howe? there is (are)maintenance of control for Keith Howe. are favorable alternatives,with being slightly more attractive, if Howe is willing to assumethe risk of higher leverage. Why? The input in the box below willnot be graded, but may be reviewed and considered by yourinstructor.