Question: Electronics is considering two plans for raising $ 1 comma 0 0 0 comma 0 0 0 $ 1 , 0 0 0 , 0

Electronics is considering two plans for raising
$ 1 comma 000 comma 000$1,000,000
to expand operations. Plan A is to issue
99%
bonds payable, and plan B is to issue
400 comma 000400,000
shares of common stock. Before any new financing,
AGAG
Electronics has net income of
$ 450 comma 000$450,000
and
300 comma 000300,000
shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of
$ 900 comma 000$900,000
before interest and taxes. The income tax rate is
2121%.
Analyze the
AGAG
Electronics situation to determine which plan will result in high

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