The XON Oil Corporation plans to invest $1 million in oil exploration. The corporation is considering two plans to raise the money. Under Plan #1, 9% bonds would be issued at par. Under Plan #2, additional common shares would be sold at $20 per share. The corporation currently has 300,000 common shares outstanding, and total equity of $3,000,000. The corporation expects to earn $700,000 each year before bond interest and taxes. After calculating the net income under each plan (assuming a 50% tax rate), what would be the return on equity under each plan?

		Plan #1: 8.75% and Plan # 2: 10.17%
		Plan #1: 10.17% and Plan # 2: 8.75%
		Plan #1: 11.17% and Plan # 2: 11.17%.
		Plan #1: 10.17% and Plan # 2: 8.00%