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  • Nov 13, 2012, 01:19 PM
    Marines213
    Accounting
    Burden Inc. is considering these two alternatives to finance its construction of a new $2000000 plant:

    (a) Issuance of 200000 shares of common stock at the market price of $10 per share.
    (b) Issuance of $2000000, 6% bonds at face value.

    I have to complete a table:
    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 700000
    Earnings per share $ $

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