Oriole Company is considering these two alternatives for financing the purchase of a fleet of airplanes:

Issue $58,500$ shares of common stock at $$42$ per share. $($Cash dividends have not been paid nor is the payment of any

contemplated.$)$

Issue $12\%,10-$year bonds at face value for $$2,457,000.$

It is estimated that the company will earn $$881,500$ before interest and taxes as a result of this purchase. The company has an

estimated tax rate of $30\%$ and has $92,000$ shares of common stock outstanding prior to the new financing.

Determine the effect on net income and earnings per share for $($a$)$ issuing stock and $($b$)$ issuing bonds. Assume the new shares or new

bonds will be outstanding for the entire year. $($Round earnings per share to $2$ decimal places, e$.$g$.2\mathrm{.}66.)$