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Wildhorse airlines is considering these two alternatives for financing the purchase of a fleet of...

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Accounting

Wildhorse airlines is considering these two alternatives for financing the purchase of a fleet of airplanes. 1. issue 56,000 shares of common stock at 45 per share. (Cash dividends have not been paid, nor is the payment of any contemplated.)2. issue 13%10-year bonds at face value for 2,520,000. It is estimated that the company will earn 820,000 before interest and tases as a result of this purchase. The company has an estimated tax rate of 30% and has 95,500 shares of common stock outstanding prior to the new financing. Determine the effect on net income and earning per share for issuing stock and issuing bonds. Assusme the new shares or new bods will be outstanding for the entire year. Start with income before interest and taxes.
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