Phelps Canning Company is considering an expansion of its facilities. Its current income statement is as follows $5,100,000 2,550,000 1,810,000 Sales Less: Variable expense (sex of sales) Fixed expense Earnings before interest and taxes (81) Interest (10% cost) Earnings before taxes (ET) Tax (25%) 740,000 220,00 520,800 182,000 Earnings after taxes (EAT) $338,00 Shares of common stock EPS 210,000 $1.61 Phelps Canning Company is currently financed with 50 percent debt and 50 percent equity (common stock) To expand tacilities, Mr. Phelois estimates a need for $21 million in additional financing His investment dealer has laid out three plans for him to consider 1 Sell $21 million of debt at 9 percent 2 Sell $2 million of common stock at $15 per share, 3 Sell $105 million of debt at 10 percent and $105 million of common stock at $20 per share