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Cullumber Health is considering two alternatives for the financing of some high technology medical equipment. These two alternatives

are:

Issue $60,000$ shares of $$10$ par value common stock at $$50$ per share.

Issue $$3,000,000,8\%,10-$year bonds at par.

It is estimated that the company will earn $$952,000$ before interest and taxes as a result of acquiring the medical equipment. The

company has an estimated tax rate of $40\%$ and has $80,000$ shares of common stock outstanding prior to the new financing.

Determine the effect on net income and earnings per share for these two methods of financing. $($Round earnings per share to $2$ decimal

places, e$.$g$.2\mathrm{.}25.)$