Debt and Equity Financing Illustration: Microsystems is considering two plans for financing the construction of a new E5 million plant. Plan A involves issuance of 200,000 ordinary shares at the current market price of E25 per share. Plan B)involves issuance of E5 million, 8% bonds at face value. Income before interest and taxes on the new plant will be $1.5 million. Income taxes are expected to be 30%. Microsystems currently has 100,000 ordinary shares outstanding. The next illustration shows the alternative effects on earnings per share