Question: please help with parts 1-3 thanks!! AF Electronics is considering two plans lor raising $5,000,000 to expand operations. Plan A is to issue 9% bonds

AF Electronics is considering two plans lor raising $5,000,000 to expand operations. Plan A is to issue 9% bonds payable, and plan B is to issue 700,000 shares of common stock. Before any now financing. AF Electronics has net income of $450,000 and 100,000 shares of common stock outstanding. Management belleves the company can use the new funds to eam additional income of $900,000 before interest and taxes. The income tax rate is 30%. Analye the AF Electronics situation to determine which plan will resull in higher earmings per stare. (Complote all answer boxes. Enter " 0for any zero balances. Round earnings per share-amounts to the nearest cent) Begin by completing the analysis below for plan A, then plan B
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
