Question 18 4 pts Watertown Inc. needs to raise $1,000,000 to expand the company. Watertown Inc. is considering the issuance of either: 1. $1,000,000 of 7% bonds payable to borrow the money; or 2. 100,000 shares of common stock issued at $10 per share. Before any new financing, Watertown Inc. expects to earn net income of $400,000, and the company already has 100,000 shares of common stock outstanding. Watertown Inc. believes the expansion will increase income before interest and income tax by $100,000. The income tax rate is 30%. Which choice of raising capital should Watertown Inc. use if they are concerned with earnings per share? O Watertown Inc. should borrow the money by issuing bonds payable since it will result in an earnings per share of $4.21. Watertown Inc. should borrow the money by issuing bonds payable since it will result in an earnings per share of $3.50. o Watertown Inc. should issue 100,000 shares of common stock since it will result in an earnings per share of $1.75. O Watertown Inc. should issue 100,000 shares of common stock since it will result in an earnings per share of $2.35 O None of the above