Q 3 - Mahir Inc. is considering two alternatives to finance its construction of a new $5. million plant at the beginning of the year: (a). Issue 250,000 common shares at a market price of $20 per share, or (b). Issue S5 million of 6% bonds at face value. Once the new plant is built, Mahir expects to carn an additional S1.5 million of profit before interest and income tax. It has 500,000 common shares and $10 million of shareholders' equity before the new financing. Issue Equity $1,500,000 Issue Debt $1,500,000 $ Income before interest and taxes Interest expense from bonds Income before income taxes Income tax expense (25%) Net income Outstanding shares Earnings per share Instructions Determine the effect on net income and earnings per share for these two methods of financing