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Delray Technology is considering these two alternatives to finance its

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Delray Technology is considering these 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, 6% bonds at face value.;Complete the table and indicate which alternative is preferable.;Issue Stock Issue Bond;Income before interest and taxes $1,000,000 $1,000,000;Interest expense from bonds;Income before income taxes;Income tax expense (30%);Net income;Outstanding shares 700,000;Earnings per share $ $

 

Paper#26185 | Written in 18-Jul-2015

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