E14-20 Analyzing alternative plans to raise money Learning Objective 2 SB Electronics is considering two plans for raising $4,000,000 to expand operations. Plan A is to issue 9% bonds payable, and plan B is to issue 500,000 shares of com- mon stock. Before any new financing, SB Electronics has net income of $350,000 and 300,000 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 30%. Analyze the SB Electronics situation to determine which plan will result in higher carnings per share. Use Exhibit 14-6 as a guide. EPS Plan A $1.96