Question: Problem 1010 Points) The Sleepy Corporation needs to raise $5,000,000 of funds in order to build a factory. The factory will generate $2,000,000 of net
Problem 1010 Points) The Sleepy Corporation needs to raise $5,000,000 of funds in order to build a factory. The factory will generate $2,000,000 of net income before interest and taxes. The corporation is exploring two alternatives to raising the needed funds: Issue an additional 200,000 shares of common stock b. Issue $5,000,000 of 8% Bonds Other facts: Common stock currently outstanding: 100,000 shares Tax Rate: 20% Instructions: Calculate the earnings per share under each alternative 1
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