Two businesses must consider how to raise \(\$ 10\) million.

Milwaukee Corporation is in the midst of its most successful period since it began operations in 1952. For each of the past 10 years, net income and earnings per share have increased by 15 percent. The outlook for the future is equally bright, with new markets opening up and competitors unable to manufacture products of Milwaukee's quality. Milwaukee Corporation is planning a large-scale expansion.

Green Bay Company has fallen on hard times. Net income has remained flat for five of the last six years, even falling by 10 percent from last year's level of profits. Top management has experienced unusual turnover, and the company lacks strong leadership. To become competitive again, Green Bay Company desperately needs \(\$ 10\) million for expansion.

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1. Propose a plan for each company to raise the needed cash. Which company should borrow? Which company should issue stock? Consider the advantages and the disadvantages of raising money by borrowing and by issuing stock, and discuss them in your answer.
2. How will what you learned in this problem help you manage a business?