Plan $1$:

Annual interest expense: issues $$6,000,000$ x Bonds $0\mathrm{.}08=$ $$480,00$

Expected net income: expected yearly income $$1,200,000-$ interest expense $$480,000=$ $$720,000$

Expected EPS: expected net income $$720,000/400,000$ shares $=$ $$1\mathrm{.}80$ per share

Plan $2$:

Annual interest expense: common stock $$3,500,000$ x Bonds $0\mathrm{.}08=$ $$280,000($annual interest expense$)$

Expected net income: expected yearly income $$1,200,000$ interest expense $$280,000=$ $$920,000$

Total number of shares: existing shares $400,000+$ new shares $100,000=500,000$

Expected EPS: $$920,00/$ shares $500,00=$ $$1\mathrm{.}84$ per share

$$ Discuss at least two factors that should be considered in evaluating the two plans.