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The Chief Financial Officer of Manning Company is considering two alternatives for the capital structure of Manning Company. At December 31, 2016 the company had no debt financing. At that point it had $1,000,000 in assets and $1,000,000 in stockholders equity. If it continues under this structure, then during the coming year, 2017, she estimates that net income will be $75,000, and average as well as year-end stockholders equity will be $1,000,000 with 50,000 shares outstanding during the entire year. (Assume that the company pays out all net income as a dividend at the end of each year.) Alternatively, the company could choose to issue $300,000 of 5% debt on January 1, 2017 and immediately repurchase 25,000 shares for $300,000. Under this course of action the 2017 net income of $75,000 would be reduced for interest charges (ignore income taxes).

Determine the Companys net income and earnings per share for 2016 and 2017 without debt financing and with debt financing. (Ignore taxes in your computation).