AF Electronics is considering two plans for raising $3,000,000 to expand operations. Plan A is to issue 6% bonds payable, and plan B is to issue 100,000 shares of common stock. Before any new financing, AF Electronics has net income of $200,000 and 300,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of $400,000 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 "0" 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 $3,000,000 of 6% Bonds Payable Plan B: Issue $3,000,000 of Common Stock $ 200,000 Net income before new project Expected income on the new project before interest and income tax expenses 400,000 Less: Interest expense 180,000 Project income before income tax 220,000 46,200 Less: Income tax expense Project net income Net income with new project Earnings per share with new project: Plan A Plan B 173,800 $ 373,800 1.25