Question 7.3 La Corporation is considering two plans for raising $2,500,000 to expand its current operations. The first p ves the sale of $2,500,000, 8%, 10-year bonds sold at face value. The second plan involves selling be ommon shares at $50 each. Lannister Corporation currently has outstanding 200,000 shares of stock income of $900,000. Either plan is expected to generate additional income of $400,000 before interest and taxes. The income tax rate is 30%. Required 1. Calculate earnings per share for both plans. (Total: 24 marks) TE

La. -nrporation is considering two plans for raising $2,500,000 to expand its current operations. The first, involves selling 2 . ives the sale of $2,500,000,8%,10-year bonds sold at face value. The second plan 200,000 shares of stock income of $400,000 before inte. income of $900,000. Either plan is expected to generate additional d taxes. The income tax rate is 30%. Required 1. Calculate earnings per share for both plans