complete the following table and indicate which alternative is preferable 581458

Laci Inc. is considering two alternatives to finance its construction of a new $2 million plant.

(a) Issuance of 200,000 shares of common stock at the market price of $10 per share.

(b) Issuance of $2 million, 8% bonds at face value.

Complete the following table, and indicate which alternative is preferable.

Issue Stock

Issue Bond

Income before interest and taxes



Interest expense from bonds

Income before income taxes



Income tax expense (30%)

Net income



Outstanding shares


Earnings per share