{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T03:32:40-04:00", "answer_date": "2024-06-28 03:32:40", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4230176", "url": "\/study-help\/questions\/gilliland-airlines-is-considering-two-alternatives-for-the-financing-of-4230176", "question_creation_date_js": "2024-06-28T03:32:40-04:00", "question_creation_date": "Jun 28, 2024 03:32 AM", "meta_title": "[Solved] Gilliland Airlines is considering two alt | SolutionInn", "meta_description": "Answer of - Gilliland Airlines is considering two alternatives for the financing of a purchase of a fleet of airplanes. These two | SolutionInn", "meta_keywords": "gilliland,airlines,two,alternatives,financing,purchase,fleet,airplanes,1,issue,88,500,shares", "question_title_h1": "Gilliland Airlines is considering two alternatives for the financing of a purchase of a fleet of airplanes. These two alternatives are: 1. Issue 88,500 shares", "question_title": "Gilliland Airlines is considering two alternatives for the financing of a purchase", "question_title_for_js_snippet": "Gilliland Airlines is considering two alternatives for the financing of a purchase of a fleet of airplanes These two alternatives are 1 Issue 88,500 shares of common stock at $30 per share (Cash dividends have not been paid nor is the payment of any contemplated ) 2 Issue 6 , 10 year bonds at face value for $2,655,000 Plan One Issue Stock Plan Two Issue Bonds Net income $ $ Earnings per share $ It is estimated that the company will earn $771,000 before interest and taxes as a result of this purchase The company has an estimated tax rate of 40 and has 119,600 shares of common stock outstanding prior to the new financing Determine the effect on net income and earnings per share for these two methods of financing ", "question_description": "

Gilliland Airlines is considering two alternatives for the financing of a purchase of a fleet of airplanes. These two alternatives are:<\/p>
1.<\/strong><\/td> Issue 88,500 shares of common stock at $30 per share. (Cash dividends have not been paid nor is the payment of any contemplated.)<\/td> <\/tr>
2.<\/strong><\/td>

Issue 6%, 10-year bonds at face value for $2,655,000.<\/p>

Plan One Issue Stock<\/strong><\/p> <\/td>

Plan Two Issue Bonds<\/strong><\/p> <\/td> <\/tr>

Net income<\/td>

$<\/p> <\/td>

$<\/p> <\/td> <\/tr>

Earnings per share<\/td>

<\/p> <\/td>

$<\/p> <\/td> <\/tr> <\/tbody><\/table> <\/td> <\/tr> <\/tbody><\/table>

It is estimated that the company will earn $771,000 before interest and taxes as a result of this purchase. The company has an estimated tax rate of 40% and has 119,600 shares of common stock outstanding prior to the new financing. Determine the effect on net income and earnings per share for these two methods of financing.<\/p>", "transcribed_text": "", "related_book": { "title": "Global Strategy", "isbn": "0357512367, 978-0357512364", "edition": "5th Edition", "authors": "Mike W. Peng", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/649592eaa157d_32303.jpg", "uri": "\/textbooks\/global-strategy-5th-edition-9780357512364", "see_more_uri": "" }, "free_related_book": { "isbn": "1806214660", "uri": "\/textbooks\/lean-philosophy-lean-six-sigma-lean-startup-lean-enterprise-lean-analytics-5s-methodologies-process-and-techniques-for-building-a-lean-enterprise-to-a-lean-business-1st-edition-978-1806214662-253793", "name": "Lean Philosophy Lean Six Sigma Lean Startup Lean Enterprise Lean Analytics 5s Methodologies Process And Techniques For Building A Lean Enterprise To A Lean Business", "edition": "1st Edition" }, "question_posted": "2024-06-28 03:32:40", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/go-to-wwwcolumbiacom-to-find-columbia-sportswear-s-home-page", "description": "Go to www.columbia.com to find Columbia Sportswear s home page. 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