Olga Inc. 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, \(8 \%\) bonds at par Complete the table and indicate which alternative is preferable

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Income before interest and taxes Interest expense from bonds Income before income taxes Income tax expense (30%) Net income Outstanding shares Earnings per share Issue Stock $1,000,000 $ $ Issue Bond $1,000,000 $ 700,000