=+2" (Examination level) Eastwell ple is to be established shortly. The founders are consid-

ering their options with regard to capital structure. A total of Elm will be needed to establish the business and the three ways of raising these funds being considered are:

a Selling 500,000 shares at £2.00.

b Selling 300,000 shares at £2.00 and borrowing £400,000 with an interest rate of 12 per cent.

Selling 100,000 shares at £2.00 and borrowing £800,000 at an interest rate of