Sunland Inc. is considering two alternatives to finance its construction of a new $2.20 million...
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Sunland Inc. is considering two alternatives to finance its construction of a new $2.20 million plant (a) Issuance of 220,000 shares of common stock at the market price of $10 per share. (b) Issuance of $2,200,000, 7% bonds at face value Complete the following table. (Round earnings per share to 2 decimal places, e.g. 0.25.) Issue Stock Issue Bond $650,000 $650,000 Income before interest and taxes Interest expense Income before income taxes Income tax expense (30%) Net income $ Outstanding shares 430,000 Earnings per share $ Indicate which alternative is preferable. if stock is used. However, earnings per share is than earnings per share if bonds are used because of the additional shares of stock that are outstanding. Net income is
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