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Seattle Adventures, Incorporated, is trying to decide between the following two alternatives to finance its new $17 million gaming center: a. Issue $17 million, 6% note. b. Issue 1 million shares of common stock for $17 per share. Required: 1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. 2. Which alternative results in the higher earnings per share? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. Note: Enter your answers in dollars, not millions (i.e., $5.5 million should be entered as 5,500,000). Round your "Earnings per Share" to 2 decimal places. Operating income Interest expense (on note only) Income before tax Income tax expense (35%) Net income Issue Note Issue Stock $ 9,200,000 $ 9,200,000 Number of shares 2,200,000 3,200,000 Earnings per share (Net income + Number of shares) Show less▲

Seattle Adventures, Incorporated, is trying to decide between the following two alternatives to finance its new $17 million gaming center: a. Issue $17 million, 6% note. b. Issue 1 million shares of common stock for $17 per share. Required: 1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. 2. Which alternative results in the higher earnings per share? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. Note: Enter your answers in dollars, not millions (i.e., $5.5 million should be entered as 5,500,000). Round your "Earnings per Share" to 2 decimal places. Operating income Interest expense (on note only) Income before tax Income tax expense (35%) Net income Issue Note Issue Stock $ 9,200,000 $ 9,200,000 Number of shares 2,200,000 3,200,000 Earnings per share (Net income + Number of shares) Show less▲

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Seattle Adventures, Incorporated, is trying to decide between the following two alternatives to finance its new $17 million gaming center: a. Issue $17 million, 6% note. b. Issue 1 million shares of common stock for $17 per share. Required: 1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. 2. Which alternative results in the higher earnings per share? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. Note: Enter your answers in dollars, not millions (i.e., $5.5 million should be entered as 5,500,000). Round your "Earnings per Share" to 2 decimal places. Operating income Interest expense (on note only) Income before tax Income tax expense (35%) Net income Issue Note Issue Stock $ 9,200,000 $ 9,200,000 Number of shares 2,200,000 3,200,000 Earnings per share (Net income + Number of shares) Show less▲
Transcribed Image Text:Seattle Adventures, Incorporated, is trying to decide between the following two alternatives to finance its new $17 million gaming center: a. Issue $17 million, 6% note. b. Issue 1 million shares of common stock for $17 per share. Required: 1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. 2. Which alternative results in the higher earnings per share? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. Note: Enter your answers in dollars, not millions (i.e., $5.5 million should be entered as 5,500,000). Round your "Earnings per Share" to 2 decimal places. Operating income Interest expense (on note only) Income before tax Income tax expense (35%) Net income Issue Note Issue Stock $ 9,200,000 $ 9,200,000 Number of shares 2,200,000 3,200,000 Earnings per share (Net income + Number of shares) Show less▲
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