Question: SB SB Electronics is considering two plans for raising $ 4 comma 000 comma 000 $4,000,000 to expand operations. Plan A is to issue 9

SB

SB Electronics is considering two plans for raising $ 4 comma 000 comma 000

$4,000,000 to expand operations. Plan A is to issue 9

9% bondspayable, and plan B is to issue 500 comma 000

500,000 shares of common stock. Before any newfinancing, SB

SB Electronics has net income of $ 350 comma 000

$350,000 and 300 comma 000

300,000 shares of common stock outstanding. Management believes the company can use the new funds to earn additional income of $ 700 comma 000

$700,000 before interest and taxes. The income tax rate is 30

30%. Analyze the SB

SB Electronics situation to determine which plan will result in higher earnings per share. (

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