Wildhorse airlines is considering these two alternatives for financing the purchase of a fleet of...
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Wildhorse airlines is considering these two alternatives for financing the purchase of a fleet of airplanes. issue shares of common stock at per share. Cash dividends have not been paid, nor is the payment of any contemplated. issue year bonds at face value for It is estimated that the company will earn before interest and tases as a result of this purchase. The company has an estimated tax rate of and has shares of common stock outstanding prior to the new financing. Determine the effect on net income and earning per share for issuing stock and issuing bonds. Assusme the new shares or new bods will be outstanding for the entire year. Start with income before interest and taxes.
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