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Domino Inc. is considering these two alternatives to finance its

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Domino Inc. is considering these two alternatives to finance its construction of a new $2 million plant;(a) Issurance of 200,000 shares of common stock at market price of $10 per share.;(b) inssurance of $2 million, 6% bonds at face value.;Complete the table and indicate which alternative is preferable.;Issue stock issue bond;income before $1,000,000 $1,000,000;interest & taxes;interest expense;from bonds 0 120,000;income before;income taxes 1,000,000 880,000;income tax;expense 30% 300,000 264,000;net income 700,000 616,000;outstandind;shares? 700,000;earning per share??

 

Paper#26412 | Written in 18-Jul-2015

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