Suppose Zen Corporation has net income of $650,000 and 100,000 common shares outstanding before a new project. The company needs $700,000 for expansion, and management is considering two financing plans Plan 1 is to issue $700,000 of 11 percent bonds. . Plan 2 is to issue 60,000 common shares for $700,000. Zen Corporation management believes the new cash can be invested in operations to earn income of $230,000 before interest and taxes. Given the corporation's tax rate of 40 percent, which is the better plan? Why? (Round earnings per share amounts to the nearest cont.) Plan 1 seems more favourable because it has an EPS of $.which is higher than the EPS or Plan 2, which is $. However, the company's ability to pay the interest on the bonds must also be considered