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AG electronics is considering two plans for raising 1,000,000 to expend operations. Plan a is to issue 9% bonds payable and plan b is to
AG electronics is considering two plans for raising 1,000,000 to expend operations. Plan a is to issue 9% bonds payable and plan b is to issue 100,000 shares of common stock. Before any new financing AG electronics has net income 350,000 and 200,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of 700,000 before interest and taxes. the income tax rate 21% analyze the afg electronics situation to determine which plan will result higher earnings per share
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