Question: Metlock, Inc. is considering these two alternatives to finance its construction of a new $1.25 milion plant: 1. Issuance of 125,000 shares of common stock

Metlock, Inc. is considering these two alternatives to finance its construction of a new $1.25 milion plant: 1. Issuance of 125,000 shares of common stock at the market price of $10 per share. Issuance of $1.25 million, 8% bonds at face value. 2. Complete the table. (Round earnings per share to 2 decimal places, es $2.66.) Issue Stock $1.530.000 Issue Bonds $1,530,000 Income before interest and taxes Interest expense from bonds Income before income taxes Income tax expense (35%) Income before interest and taxes Issue Stock $1,530,000 Issue Bonds $1,530,000 Interest expense from bonds Income before income taxes Income tax expense (35%) Net income $ Outstanding shares 630,000 Earnings per share
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
