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% S10-18 (similar to) Question Help Sailing Marina needs to raise $3.0 million to expand the company. The company is considering issuing either $3,000,000 of 8% bonds payable to borrow the money; or 100,000 shares of common stock at $30 per share. (Click the icon to view additonal information.) Read the requirements Start by preparing the analysis to determine which plan is likely to result in higher earnings per share (EPS). (For amounts with a $0 balance, make sure to enter "0" in the appropriate column.) Plan A Plan B Issue $3,000,000 of 8% Bonds Payable 200,000 $ 500,000 (240,000) Issue $3,000,000 of Common Stock 200,000 $ 500,000 0 Net income before expansion Expected project income before interest and income tax Interest expense Less Expected project income before income tax Income tax expense Less: Expected project net income Total company net income 260.000 (78,000 500,000 (150,000) 182.000 350.000 382,000 $ 550,000 Earnings per share after expansion 3.82 2.75 Which financing plan would you recommend based solely on EPS? Plan A % S10-18 (similar to) Question Help Sailing Marina needs to raise $3.0 million to expand the company. The company is considering issuing either $3,000,000 of 8% bonds payable to borrow the money; or 100,000 shares of common stock at $30 per share. (Click the icon to view additonal information.) Read the requirements Start by preparing the analysis to determine which plan is likely to result in higher earnings per share (EPS). (For amounts with a $0 balance, make sure to enter "0" in the appropriate column.) Plan A Plan B Issue $3,000,000 of 8% Bonds Payable 200,000 $ 500,000 (240,000) Issue $3,000,000 of Common Stock 200,000 $ 500,000 0 Net income before expansion Expected project income before interest and income tax Interest expense Less Expected project income before income tax Income tax expense Less: Expected project net income Total company net income 260.000 (78,000 500,000 (150,000) 182.000 350.000 382,000 $ 550,000 Earnings per share after expansion 3.82 2.75 Which financing plan would you recommend based solely on EPS? Plan A