Alliance Agreement Corporation Is Considering Two Plans for Raising $2,500,000

question 69

Essay

Alliance Agreement Corporation is considering two plans for raising $2,500,000 to expand its current operations.The first plan involves the sale of $2,500,000,8%,10-year bonds sold at face value.The second plan involves selling 50,000 common shares at $50 each.Alliance Agreement Corporation currently has outstanding 200,000 shares of stock and a net income of $900,000.Either plan is expected to generate additional income of $400,000 before interest and taxes.The income tax rate is 30%.Calculate earnings per share for both plans.

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Definitions:

Prevented

Stopped from happening or avoided through proactive measures.

Personality

Refers to the combination of characteristics or qualities that form an individual's distinctive character.

Emotion

A complex psychological state that involves an individual's subjective experience, physiological response, and behavioral or expressive response.

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The faculty or state of being able to see with the eyes, and also the way in which one sees or conceives of something.