AF Electronics is considering two plans for raising $1,000,000 to expand operations. Plan A is to issue 4% bonds payable, and plan B is to issue 300,000 shares of common stock. Before any new financing, AF Electronics has a net income of $350,000 and 400,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of $700,000 before interest and taxes. The income tax rate is 21%. Analyze the AF Electronics situation to determine which plan will result in higher earnings per share. (Complete all answer boxes. Enter "0" for any zero balances. Round earnings per share amount to the nearest cent.)

Begin by completing the analysis below for plan A, then plan B.

	Plan A: Issue $1,000,000
	of 4% Bonds Payable
Net income before new project		350,000
Expected income on the new project before
interest and income tax expenses
Less: Interest expense
Project income before income tax
Less: Income tax expense
Project net income
Net income with new project
Earnings per share with new project:
Plan A
Plan B