AF Electronics is considering two plans for raising $2,000,000 to expand operations. Plan A is to issue 6% bonds payable, and plan B is to issue 200,000 shares of common stock. Before any new financing, AF Electronics has net income of $400,000 and 400,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of $800,000 before interest and taxes. The income tax rate is 21%. Analyze the AF Electronics situation to determine which plan will result in higher earnings per share. (Complete all answer boxes. Enter "O" for any zero balances. Round earnings per share amounts to the nearest cent.) Begin by completing the analysis below for plan A, then plan B. Plan A: Issue $2,000,000 Plan B: Issue $2,000,000 of 6% Bonds Payable of Common Stock Net income before new project $ 400,000 Expected income on the new project before interest and income tax expenses 800,000 120,000 Less: Interest expense Project income before income tax 680,000 142,800 Less: Income tax expense 537 200 Project net income S 937,200 Net income with new project Earnings per share with new project: 2.34 Plan A Plan B