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BE15.10 (LO 4), AN Moby Inc. is considering two alternatives to finance its construction of a new $2 million plant. a. Issuance of 200,000

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BE15.10 (LO 4), AN Moby Inc. is considering two alternatives to finance its construction of a new $2 million plant. a. Issuance of 200,000 shares of common stock at the market price of $10 per share. b. Issuance of $2 million, 8% bonds at face value. Complete the following table, and indicate which alternative is preferable. (Round EPS calculation to the nearest cent.) Income before interest and taxes Issue Stock Issue Bond $700,000 $700,000 Interest expense from bonds Income before income taxes Income tax expense (20%) Net income Outstanding shares Earnings per share Account for finance lease. $ 500,000

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