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i need some help with this one. VL. Electronics is considering two plans for raising $1,000,000 to expand operations. Plan A is to issue 6%
i need some help with this one.
VL. Electronics is considering two plans for raising $1,000,000 to expand operations. Plan A is to issue 6% bonds payablo, and plan B is fo issue 600,000 shares of common slock. Before any new francing. V. Electronics has net income of $450,000 and 100,000 shares of common stock outstanding Management belleves the company can use the new funds to earn additional income of $900,000 before interest and taxes. The income tax rate is 21%. Analyze the VL Electronics situation to determine which plan will result in higher earnings per share. (Complete all answer boxes Enter " O " for any zero balances. Round earnings per share amounts to the nearest cent) VL. Electronics is considering two plans for raising $1,000,000 to expand operations. Plan A is to issue 6% bonds payablo, and plan B is fo issue 600,000 shares of common slock. Before any new francing. V. Electronics has net income of $450,000 and 100,000 shares of common stock outstanding Management belleves the company can use the new funds to earn additional income of $900,000 before interest and taxes. The income tax rate is 21%. Analyze the VL Electronics situation to determine which plan will result in higher earnings per share. (Complete all answer boxes Enter " O " for any zero balances. Round earnings per share amounts to the nearest cent) Step by Step Solution
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