5. Anthony Manufacturing plans to raise $100 million through a new securities issue. It is considering issuing either common stock or debt. Anthonys common stock is currently trading at $50 per share; it has $1 billion of assets, $500 million of debt, and $500 million of common stock outstanding; its EBIT is $80 million; and its income tax rate is 40%. The interest rate on its debt is 6%, and new debt would also require a 6% interest rate.

a. Show the pro forma impact of a $100 million common stock issue on Anthonys balance sheet, interest coverage, and earnings per share.

b. Show the pro forma impact of a $100 million debt issue on Anthonys balance sheet, interest coverage, and earnings per share.