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Speedville Marina needs to raise $1 1 million to expand the company. Speedville Marina is considering the issuance of either - $1,100,000 of 7% bonds
Speedville Marina needs to raise \$1 1 million to expand the company. Speedville Marina is considering the issuance of either - $1,100,000 of 7% bonds payable, or - 100,000 common shares at $11 per share. (Click the icon to view additional information.) Prepare an analysis to determine which plan is likely to result in higher earnings por share Based solely on the earnings per share comparison, which financing plan would you recommend for Speodville Marina? Additional info Before any new financing, Speedville Marina expects to earn net income of $600,000, and the company already has 100,000 shares of common shares outstanding. Speedville Marina believes the expansion will increase income before interest and income tax by $220,000. The income tax rate is 35%
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