Sheridan Car Rental is considering two alternatives for the financing of a purchase of a fleet of cars. These two alternatives are:

1.		Issue 55,200 shares of ordinary shares at 40 per share. (Cash dividends have not been paid nor is the payment of any contemplated.)
2.		Issue 9%, 10-year bonds at face value for 2,208,000.

It is estimated that the company will earn 736,000 before interest and taxes as a result of this purchase. The company has an estimated tax rate of 30% and has 82,800 shares of common stock outstanding before the new financing. Determine the effect on net income and earnings per share for these two methods of financing.