Marin Inc.currently has 840,000 shares of common stock outstanding. Marin Inc. i

Question

Marin Inc.currently has 840,000 shares of common stock outstanding. Marin Inc. is considering these two alternatives to finance its construction of a new $2.30 milion plant 1 Issuance of 230,000 shares of common stock at the market price of $10 per share. 2. Issuance of $2.30 million, 7% bonds at face value. (a) Complete the table. (Round earnings per share to 2 decimal places, e.g. $2.66.) Issue Stock Issue Bonds Income before interest and $1,740,000 taxes Interest expense from bonds Income before income taxes Income tax expense (35%) Net income Outstanding shares 840,000 Earnings per share

Explanation / Answer

Issue Stock Issue Bonds Income before interestand Taxes $               17,40,000 $               17,40,000 Interest Expenses from Bonds $                              -   $                  1,61,000 ($ 2300,000 X 7%) Income Before Income Taxes $               17,40,000 $               15,79,000 Less: Income Taxe Expenses (35%) $                 6,09,000 $                  5,52,650 Net Income $               11,31,000 $               10,26,350

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.