Farar Inc. projects operating income of $4 million next year.The firms income ta

Farar Inc. projects operating income of $4 million next year.The firms income tax rate is 40%. Farar presently has 750000shares of common stock no preferred stock and no debt. The firmis considering the issuance of $6 million of 10% bonds to finance anew product that is not expected to generate an increase in incomefor two years. If Farar issues the bonds this year what willprojected EPS be next year? A. $1.53 B. $1.98 C. $3.12 D. $2.33 E. $2.72