3. ABC Corp. has 550,000 shares of $1 par value common stock. The current market price is $100. The CEO of the company is considering either a $0.10 per share cash dividend, or 8% stock dividend, or a 5- for-1 stock split. In the following, for each alternative option, calculate the impact on the items of stockholders' equity for each alternative option in the following table. (10 pt.) Option 1 Option 2 Option 3 Original After $0.1 per share cash If 8% stock If 5-for-1 Balances dividend dividend paid stock split Paid-in capital $3,500,000 $3,500,000 $3,500,000 Retained earnings $12,000,000 $11,945,000 $12,000,000 Total $15,500,000 15,445,000 $15,500,000 $15,500,000 stockholders' equity Outstanding 350,000 550,000 2,750,000 shares Par value per $1.0 $1.00 $1.00 $.20 share Market value per $100 $100 $100 $20 share Total Market $55,000,000 55,000,000 55,000,000 value of equity 4. ABC Inc. is considering two alternatives to finance its construction of a new $5 million plant. Currently, it has total number of outstanding shares is 700,000. Option 1: Issuance of 500,000 shares of common stock at the market price of $10 per share. Option 2: Issuance of $5 million, 5% bonds at par. Operating revenues and operating expenses of ABC were $10,000,000 and $9,000,000, respectively. The income tax rate is 21%. a) Show the calculation of earnings per share for option 1 and option 2 if operating revenues and operating expenses of ABC were $10,000,000 and $9,000,000, respectively. Find out the option that is better for the shareholders and explain why. (5 points) b) Show the calculation of earnings per share for option 1 and option 2 if operating revenues and operating expenses of ABC were $10,000,000 and $10,000,000, respectively (Note that no income tax for zero income). Find out the option that is better for the shareholders and explain why. (5 points)