The Green Company needs additional funds to help in the expansion of their new p

Question

The Green Company needs additional funds to help in the expansion of their new production facility. The management team assigned you to this project, you need to review the finance options for this project. Their final two options are issuing common stock or issuing bonds. You have been assigned to review the pros and cons for both options and to make a recommendation. In your analysis include both of the following options: (a) the Federal Reserve is planning to increase interest rates in the near future, (b) the Federal Reserve is planning to decrease interest rates in the near future.

Explanation / Answer

Pros and Cons of issuing bonds:

Pros:

Cons:

Pros and Cons of issuing common stock:

Pros:

Cons:

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