ABC Company currently has 1,000,000 common shares in circulation which trade on the stock exchange at $ 22 each and bonds with a par value of $ 3,000,000 (annual coupon rate: 9%). The company is considering a major expansion program of $ 5,000,000 and is considering the following three financing possibilities: An issue of common stock bringing the company net $ 20 per share. An issuance of preferred shares bringing the company net $ 100 per share and for which the annual dividend per share would be $ 11. An issue of bonds maturing in 20 years at an annual coupon rate of 12%. The company's tax rate is 40%. a) For EBIT of $ 2,500,000, calculate earnings per share for each of the three financing options described. b) Identify the point of indifference between equity financing and bond financing.