Exercise $9-1($Algo$)$ Compare financing alternatives $($LO$9-1)$

Seattle Adventures, Incorporated, is trying to decide between the following two alternatives to finance its new $$23$ million gaming center:

a$.$ Issue $$23$ million, $6\%$ note.

b$.$ Issue $1$ million shares of common stock for $$23$ per share with expected annual dividends of $$1\mathrm{.}38$ per share.

Required:

Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative

Answer the following questions for the current year

$($a$)$ By how much are interest payments higher if issuing the note?

$($b$)$ By how much are dividend payments higher by issuing stock?

$($c$)$ Which alternative results in higher earnings per share?

Complete this question by entering your answers in the tabs below.

Required $1$

Assuming the note or shares of stock are issued at the beginning of the year, complete tf alternative. $($Enter your answers in dollars, not millions $($i$.$e$.,55\mathrm{.}5$ million should be enter "Earmings per Share" to $2$ decimal places.$)$

$\backslash$table$[[,$Issue Note,Issue Stock$],[$Operating income,$$,9,800,000,$$$,9,800,000$