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Tamarisk Inc is considering these two alternatives to finance its construction of a new $205 million plant Issuance of 205000 shares

Tamarisk, Inc. is considering these two alternatives to finance its construction of a new $2.05 million plant: Issuance of 205,000 shares of common stock at the market price of $10 per share. 1. Issuance of $2.05 million, 7% bonds at face value. 2. Complete the table. (Round earnings per share to 2 decimal places, e.g. S2.66.) Issue Stock Issue Bonds Income before interest and taxes $1,690,000 $1,690,000 Interest expense from bonds Income before income taxes Income tax expense (35%) Net income Outstanding shares 790.000 Earnings per share Indicate which alternative is preferable. is preferable.

Mar 02 2020 View more View Less

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