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Evco Inc. has to choose between issuing 200,000 shares of common stock at $10 per share or issuing $2,000,000 worth of bonds at 6% interest.
Evco Inc. has to choose between issuing 200,000 shares of common stock at $10 per share or issuing $2,000,000 worth of bonds at 6% interest. Income before interest and taxes is $1,500,000. The Income tax rate is 30%. The Net Income from issuing stock will be: $1,050,000 $966,000 $1,500,000 $550,000 . 0 1 O 2 O 3 4
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