Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows:

Sales $ $5,400,000$

Variable costs $(50\%$ of sales$)2,700,000$

Fixed costs $1,840,000$

Earnings before interest and taxes $($EBIT$)$ $ $860,000$

Interest $(10\%$ cost$)280,000$

Earnings before taxes $($EBT$)$ $ $580,000$

Tax $(35\%)203,000$

Earnings after taxes $($EAT$)$ $ $377,000$

Shares of common stock $240,000$

Earnings per share $ $1\mathrm{.}57$

The company is currently financed with $50$ percent debt and $50$ percent equity $($common stock, par value of $$10).$ In order to expand the facilities, Mr$.$ Delsing estimates a need for $$2\mathrm{.}4$ million in additional financing. His investment banker has laid out three plans for him to consider:

Sell $$2\mathrm{.}4$ million of debt at $12$ percent.

Sell $$2\mathrm{.}4$ million of common stock at $$15$ per share.

Sell $$1\mathrm{.}20$ million of debt at $11$ percent and $$1\mathrm{.}20$ million of common stock at $$20$ per share.