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Shaffer Ltd. Is considering two alternatives to finance its construction of a new $2 Million plant. (a) Issuance of 200,000 ordinary shares at the market

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Shaffer Ltd. Is considering two alternatives to finance its construction of a new $2 Million plant. (a) Issuance of 200,000 ordinary shares at the market price of $10 per share (b) Issuance of $2 Million, 6%, bonds at Face Value Complete the following table and indicate which alternative is preferable Issue Shares Issue Bonds Income before interest and taxes $900,000 $900,000 Interest expense from bonds I Income before Income taxes Income tax expense Net Income Outstanding shares Earnings per share 500,000 shares

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