Rustic Campsites, Incorporated, is trying to decide between the following two alternatives to finance its new $$31$ million gaming center:

a$.$ Issue $$31$ million, $6\%$ note.

b$.$ Issue $1$ million shares of common stock for $$31$ per share with expected annual dividends of $$1\mathrm{.}86$ per share.

Required:

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

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?