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Dayton Inc. is considering two alternatives to finance its construction of a new $5 million plant. (a) Issuance of 500,000 shares of common stock at

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Dayton Inc. is considering two alternatives to finance its construction of a new $5 million plant. (a) Issuance of 500,000 shares of common stock at the market price of $10 per share. (b) Issuance of $5 million, 9% bonds at par. Instructions Complete the following table. Issue Stock Issue Bonds Income before interest and taxes 52,000,000 52,000,000 Interest expense from bonds Income before income taxes 5 Income tax expense (3096) Net income Outstanding shares 700.000

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