. Chica-Hominy Co. currently has 200,000 shares of common stock issued and outstanding. The market price of the stock is currently $10 per share. The company is considering two alternatives to finance an upcoming $1,500,000 project. The project is projected to yield $1,400,000 in annual income before interest and taxes. The income tax rate is 35%.

Financing alternatives are:

1. Issuance of 150,000 shares of common stock at the market price of $10 per share.
2. Issuance of $1.50 million, 5% bonds at par.

Use the following format to report bond interest expense, income before income taxes, income tax expense, Net income, and return on common stockholders equity for the company after the new project is in operation for both the financing options.

Stock issue Bond issue

Income before interest and taxes $1,400,000 $1,400,000

Bond interest expense 0

Income before income taxes

Income tax expense

Net income