Question
How do I complete the following table? Layton Inc. is considering two alternatives to finance its construction of a new $5 million plant. (a)Issuance of
How do I complete the following table?
Layton Inc. is considering two alternatives to finance its construction of a new $5 million plant.
(a)Issuance of 500,000 shares of common stock at the market price of $10 per share.
(b)Issuance of $5 million, 9% bonds at par.
Issue StockIssue Bonds
Income before interest and taxes$2,000,000$2,000,000
Interest expense from bonds
__________________
Income before income taxes$$
Income tax expense (30%)__________________
Net income$________$________
Outstanding shares_________700,000
Earnings per share__________________
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