Shamrock, Inc. is considering these two alternatives to finance its construction of a new $1.65 million plant:

1.		Issuance of 165,000 shares of common stock at the market price of $10 per share.
2.		Issuance of $1.65 million, 6% bonds at face value.

(a)

Complete the table. (Round earnings per share to 2 decimal places, e.g. $2.66.)

		Issue Stock		Issue Bonds
Income before interest and taxes		$1,595,000		$1,595,000
Interest expense from bonds		enter a dollar amount		enter a dollar amount
Income before income taxes		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts
Income tax expense (40%)		enter a dollar amount		enter a dollar amount
Net income		$enter a total net income		$enter a total net income
Outstanding shares		enter a number of shares		660,000
Earnings per share		$enter earnings per share rounded to 2 decimal places		$enter earnings per share rounded to 2 decimal places