Oriole Inc Is Considering Two Alternatives To Finance Its Construction Of A New 1 80 Million Plant A Issuance Of 18 1 (33.3 KiB) Viewed 13 times
Oriole Inc Is Considering Two Alternatives To Finance Its Construction Of A New 1 80 Million Plant A Issuance Of 18 2 (20.92 KiB) Viewed 13 times
Oriole Inc. is considering two alternatives to finance its construction of a new $1.80 million plant. (a) Issuance of 180,000 shares of common stock at the market price of $10 per share. Issuance of $1,800,000,6% bonds at face value. (b) Complete the following table. (Round earnings per share to 2 decimal places, e.g. 0.25.) Issue Stock Issue Bond Income before interest and taxes $700,000 Interest expense from bonds Income before income taxes Income tax expense (30%) Net income Outstanding shares $ Earnings per share Indicate which alternative is preferable. Net income is because of the additional shares of stock that are outstanding if stock is used. However, earnings per share is $700,000 520,000 than earnings per share if bonds are used
Oriole Inc. is considering two alternatives to france its construction of a new $1.80 million plant (a) Issuance of 180.000 shares of common stock at the market price of $10 per share Issuance of $1,800,000,6% bonds at face value bo Complete the following table. (Round earnings per share to 2 decimal places, e.g. 0.25.3 houe Stock sue Bond Income before interest and taxes $700,000 Interest expense from bonds Income before income taxes Income tax expense (30% Net income Outstanding shares Earnings per share indicate which alternative is preferable Net income ✔ because of higher lower if stock is used. However, earnings per share is hares of stock that are outstanding $700,000 520:000 than earnings per share if bonds are used
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