Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales Variable costs (50% of sales) Fixed costs Earnings before interest and taxes (EBIT) Interest (10% cost) Earnings before taxes (EBT) Tax (35%) Earnings after taxes (EAT) Shares of common stock Earnings per share $7,500,000 3,750,000 2,050,000 $ 1,700,000 700,000 $1,000,000 350,000 $ 650,000 450,000 1.44 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $4.5 million in additional financing. His investment banker has laid out three plans for him to consider: 1. Sell $4.5 million of debt at 9 percent. 2. Sell $4.5 million of common stock at $15 per share. 3. Sell $2.25 million of debt at 8 percent and $2.25 million of common stock at $20 per share.