Elm Corporation Plans to Invest $300 Million to Earn About

Elm Corporation plans to invest $300 million to earn about 15% before income taxes. The company is considering whether it should raise the $300 million by issuing 10% bonds payable or share capital. If the company issues the bonds, it will probably report:

A) Lower profit and lower income taxes expense than if it issues shares.
B) Higher profit and higher income taxes expense than if it issues shares.
C) Lower profit and higher income taxes expense than if it issues shares.
D) Higher profit and lower income taxes expense than if it issues shares.