Boswell Company expects net income of $5 million for 2005. Pretax earnings are projected to be $7 million. The company’s average total assets during 2005 were $25 million. It had no liabilities or preferred stock. It had 1 million shares of common stock outstanding. Boswell is considering issuing $10 million of debentures to repurchase 300,000 shares of its common stock. If the debt had been outstanding in 2005, the company would have paid $900,000 in interest expense. Calculate the company’s net income and return on equity for 2005 as reported and as they would have been if the debt had been issued. Assume average stockholders’ equity of $15 million for computing return on equity with debt financing and that the tax rate is 28.6%.