please solve

for advantage and disadvantage: choose from dropdown box

Pinnacle Medical Goods is embarking on a massive expansion. Assume plans call or opening 20 new stores during the next two years. Each store is scheduled to be 30% larger than the company's existing locations, offering more items of inventory and with more elaborate displays. Management estimates that company operations will provide $1 million of the cash needed for expansion. Pinnacle Medical must raise the remaining $7.75 million from outsiders. The board of directors is considering obtaining the $7.75 million either through borrowing at 6% or by issuing an additional 250,000 shares of common stock. This year the company has earned $4.5 million before interest and taxes and has 250,000 shares o $ par oommon stock outstanding. The market price o the co pany's stock is $31.00 per s are. Assume t a no m berore terest and a es s e d to grow by % each ear or he next two years The company's marginal income tax rate is 30%. Read the requirements. Requirement 1. Evaluate the effect of the above projected alternatives on net income and earnings per share two years from now. Begin by selecting the labels needed to analyze the effect of the alternatives on net income and to show earnings per share after the expansion. Next, enter the amounts to show the effect of the borrowing alternative, then enter the amounts to show the effect of the shares of stock alternative. (For amounts with a $0 balance, make sure to enter "O" in the appropriate column. Round the EPS calculation to two decimal places. Enter amounts in dollars instead of millions.) Alternative 1 Alternative 2 Borrow $7.75 milllion Issue 250,000 shares at 6% of stock Less Less: Requirement 2. Complete the memo to Pinnacle's management discussing the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash. Which method of raising funds would you recommend? Pinnacle Medical Goods s embarking on a massive expansion. Assume plans call or opening 20 new sto es d ring the next wo ears. ach store s scheduled to 3 % roerthan ecompa s x stin o ations. fenn m items of inventory and with more elaborate displays. Management estimates that company operations will provide $1 million of the cash needed for expansion. Pinnacle Medical must raise the remaining $7.75 million from outside The board of directors is considering obtaining the $7.75 million either through borrowing at 6% or by issuing an additional 250,000 shares of common stock. This year the company has earned $4.5 million before interest and tax and has 250 000 shares o $ par common stock outstanding. The market pnce of the company's stock is $31.0 per share. As m that n o e ore interest an a es is expectedto grow 20%, ea ar orth et The company's marginal income tax rate is 30%. Read the requirements Requirement 1. Evaluate the effect of the above projected alternatives on net income and earnings per share two years from now. Begin by selecting the labels needed to analyze the effect of the alternatives on net income and to show earnings per share after the expansion. Next, enter the amounts to show the effect of the borrowing alternative, then enter : no k. :: a t x x' #2che1re: k ti b e: hN, For amounts with a $0 balance make sure to enter in the at prooriate column. Round the PS calculation to two decimal places. Enter amounts in dollars instead of millions.) Requirements Alterna Borrow $7 at 1. Evaluate the effect of the above projected alternatives on net income and earnings per share two years from now. 2. Complete the memo to Pinnacle's management discussing the advantages Less: and disadvantages of borrowing and of issuing common stock to raise the needed cash. Which method of raising the funds would you recommend? Less: Print Done Requirement 2 Com recommend? ete the memo to Pinnacle's management discussing he advantages and disadvantages o borrow and o suing common stock to raise ene e ca w ich method o ra ng und ou ou Choose from any list or enter any number in the input fields and then continue to the next question. tpe Pinnacle Medical Goods s embarking on a massive expansion. Assume plan call or opening 20 new stores during the next tw years. ach store s scheduled tobe 3 % lar than the company's existing ocations, o erin more items of inventory and with more elaborate displays. Management estimates that company operations will provide $1 million of the cash needed for expansion. Pinnacle Medical must raise the remaining $7.75 million from outsiders. The board of directors is considering obtaining the $7.75 mil on either through borrowing at 6% or by issuing an additional 250 000 shares on sock. This ear u or any has earned 24. m on intere and and has 250,000 shares of $1 par common stock outstanding. The market price of the company's stock is $31.00 per share. Assume that income before interest and taxes is expected to grow by 20% each year or the next two years The company's marginal income tax rate is 30%. Read the requirements. The advantages and disedvantages of borrowing to raise cash tor expansion are as tollows: (If a box is not used in the table, leave the box empty; do not select a label.) Advantages Disadvantages The advantages and disedvantages of issuing stock to rase cash tor expansion are as tollows: (If a box is not used in the table, leave the box empty; do not select a label.) Advantages Dilution of the ownership interests of existing stockholders. Increases the financial risk of the company. It avoids the creation of a liability and its related payments. The method of raising funds that I would recommend depends u It does not change the present ownership of the business. If the company is looking to select an expansion plan that results recommend issuing stock Choose from any list or enter any number in the input fields and then continue to the next question. Results in a higher earnings per share of common stock. Results in a lower earnings per share of common stock. to raise cash for expansion. If the company is looking for a "safe" means of raising cash I would avascriptdoExercise 2) Pinnac e Medica oods is embarking on a massive expansion. Assume plans cal or opening 20 new stores during he next two yea s a store is scheduled to be 30% a ger than the compan s existing locations, o ering more items of inventory and with more elaborate displays. Management estimates that company operations will provide $1 million of the cash needed for expansion. Pinnacle Medical must raise the remaining $7.75 million from outsiders. The board of directors s considering obtainin the $7.75 millon either rou h bomo ng a16%, or by ssuing an addition 250 000 shares ofcommon stock This e r e company se med 5 milion before terest and axes and has 250,000 shares o $ -par common stock outstanding. The market price of he company's s ock s S31.00 per share. Assume hat income be reinterest and taxes se erow %, each year or e ext years. The company's marginal income tax rate is 30%. Read the requirements. The advantages and disadvantages of borrowing to raise cash for expansion are as tollows: (If a box is not used in the table, leave the box empty:; do not select a label. Disadvantagets Dilution of the ownership interests of existing stockholders. Increases the financial risk of the company. It avoids the creation of a lisbility and its related payments The advantages and disadvantages of issuing stock to raise cas present ownership of the businehe box empty do not select a label) Results in a higher eernings per share of common stock. Results in a lower earnings per share of common stock. The method of raising funds that I would recommend depends upon the goal of the company in relation to this plan. If the company is looking to select an expansion plan that results in a higher earnings per share I would recommend borrowing recommend issuing stock Choose from any list or enter any number in the input fields and then continue to the next question. to raise cash for expansion. If the company is looking for a "safe" means of raising cash I would