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Blossom Inc. is considering two alternatives to finance its construction of a new $2.00 million plant. (a) Issuance of 200,000 shares of common stock at

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Blossom Inc. is considering two alternatives to finance its construction of a new $2.00 million plant. (a) Issuance of 200,000 shares of common stock at the market price of $10 per share. (b) Issuance of $2,000,000, 8% bonds at face value. Complete the following table. (Round earnings per share to 2 decimal places, e.g. 0.25.) Issue Stock $710,000 Issue Bond $710,000 Income before interest and taxes Interest expense Income before income taxes Income tax expense (40%) Net income Outstanding shares 510,000 Earnings per share Indicate which alternative is preferable

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