Rustic Campsites, Incorporated, is trying to decide between the following two alternatives to finance its new $$34$ million gaming center:

Issue $$34$ million, $6\%$ note.

Issue $1$ million shares of common stock for $$34$ per share with expected annual dividends of $$2\mathrm{.}04$ per share.

Required:

$1.$ Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative.

$2.$ Answer the following questions for the current year:

$($a$)$ By how much are interest payments higher if issuing the note?

$($b$)$ By how much are dividend payments higher by issuing stock?

$($c$)$ Which alternative results in higher earnings per share?