Question: RL Electronics is considering two plans for raising $5,000,000 to expand operations. Plan A is to issue 10% bonds payable, and plan B is to

RL Electronics is considering two plans for raising $5,000,000 to expand operations. Plan A is to issue 10% bonds payable, and plan B

RL Electronics is considering two plans for raising $5,000,000 to expand operations. Plan A is to issue 10% bonds payable, and plan B is to issue 200,000 shares of common stock. Before any new financing, RL has net income of $450,000 and 500,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of $900,000 before interest and taxes. The income tax rate is 20%. Analyze the RL Electronics situation to determine which plan will result in higher earnings per share. Enter "0" for any zero balances. Round earnings per share amounts to the nearest cent

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