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

$700,000

$700,000

Interest expense from bonds

Income before income taxes

$

$

Income tax expense (30%)

Net income

$

$

Outstanding shares

500,000

Earnings per share