Brief Exercise 11-11 (Part Level Submission)

Sage Hill Inc.currently has 750,000 shares of common stock outstanding. Sage Hill Inc. is considering these two alternatives to finance its construction of a new $1.85 milion plant:

1.		Issuance of 185,000 shares of common stock at the market price of $10 per share.
2.		Issuance of $1.85 million, 8% bonds at face value.

Complete the table. (Round earnings per share to 2 decimal places, e.g. $2.66.) Issue StockIssue Bonds Income before interest and taxes $1,650,000 1,650,000 Interest expense from bonds Income before income taxes Income tax expense (30%) Net income Outstanding shares 750,000 Earnings per share