Question 2) 15 marks (Space allowed: 1 sheet of paper, .e. 1 photo) Time allotted: 25 min The ZON Gas International plans to invest $5 million in natural gas exploration. The company is considering two plans to raise the money. Under Plan #1, a 10% Coupon bond would be issued at par. Under Plan #2, additional common shares would be sold at $25 per share. The company currently has 800,000 common shares outstanding, and total equity of $20,000,000. With the project, the income is expected at $1,000,000 each year before bond interest and taxes. a) Calculate net income and earning per share under each plan (assume a 40% tax rate). (Show calculation and indicate your final answers) b) True/False (True, no explanation; False, explain) Issuing a bond would cost the company interest and reduces the net income; therefore, it is not wise to borrow money