Question
Moby Inc. is considering two alternatives to finance its construction of a new $1.40million plant. (a) Issuance of140,000 shares of common stock at the market
Moby Inc. is considering two alternatives to finance its construction of a new $1.40million plant.
| (a) | Issuance of140,000 shares of common stock at the market price of $10 per share. |
| (b) | Issuance of $1.40 million,8% bonds at face value. |
Complete the following table.(Round earnings per share to 2 decimal places, e.g. 0.25.)
| Issue Stock | Issue Bond | |
| Income before interest and taxes | $793,300 | $793,300 |
| Interest expense from bonds | ||
| Income before income taxes | ||
| Income tax expense (35%) | ||
| Net income | $ | $ |
| Outstanding shares | 653,300 | |
| Earnings per share | $ | $ |
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell
14th Edition
1119707110, 978-1119707110
