Chapter 12, Problem 12.2EX

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

To Explain: The factors other than earnings per share that should be considered in evaluating the alternative financing plans.