Olga Inc. is considering two alternatives to finance its construction of a new $4-million plant at the beginning of the year:
(a) Issue 200,000 common shares at a market price of $20 per share, or
(b) Issue $4 million of 6% bonds at face value. Once the new plant is built, Olga expects to earn an additional $1 million of profit before interest and income tax. It has 500,000 common shares and $10 million of shareholders' equity before the new financing. Complete the following table for the year.

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Issue Debt Issue Equity $1,000,000 Profit before interest and income tax Interest expense Profit before income tax Income tax expense (25%) Profit Number of shares Earnings per share $1,000,000