Skysong, Inc. is considering these two alternatives to finance its construction of a new $1.40 million plant: There currently are 660,000 number of shares of common stock outstanding.

1.		Issuance of 140,000 shares of common stock at the market price of $10 per share.
2.		Issuance of $1.40 million, 5% 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		$1,560,000		$1,560,000
Interest expense from bonds		enter a dollar amount		enter a dollar amount
Income before income taxes		enter a dollar amount		enter a dollar amount
Income tax expense (30%)		enter a dollar amount		enter a dollar amount
Net income		$enter net income in dollars		$enter net income in dollars
Outstanding shares		enter a dollar amount		$enter a dollar amount
Earnings per share		$enter a dollar amount		$enter a dollar amount