please explain

Blossom Inc. is considering two alternatives to finance its construction of a new $ 2.00 million plant. (a) Issuance of 200,000 shares of common stock at the market price of $10 per share. Issuance of $ 2,000,000, 8% bonds at face value. (b) b Complete the following table. (Round earnings per share to 2 decimal places, e8. 0.25) Issue Stock Issue Bond Income before interest and taxes $ 710,000 $ 710,000 Interest expense 0 160,000 Income before income taxes 710,000 550.000 Income tax expense (40%) 284,000 i Net income $ 426,000 Outstanding shares 710,000 510,000 forhold Interest expense 0 160,000 i Income before income taxes 710,000 550,000 Income tax expense (40%) 284,000 i Net income 426.000 $ Outstanding shares 710,000 510,000 Earnings per share $ Indicate which alternative is preferable. than earnings per share if bonds are used Net Income is if stock is used. However, earnings per share is because of the additional shares of stock that are outstanding