P15-7A Two businesses are considering how to raise $10 million. Franklin Corporation is in the midst of its most successful period since it began operations in 1972. For each of the past ten years, net income and earnings per share have increased by at least 15%. The outlook for the future is equally bright, with new markets opening up and competitors unable to manufacture products of Franklin's quality. Franklin Corporation is planning a large-scale expansion. Westchase Company has fallen on hard times. Net income has remained flat for five of the last six years, with this year falling by 10% from last year's level of profits. Top management has experienced unusual turnover, and the company lacks strong leadership. To become competitive again, Westchase Company desperately needs $10 million for expansion. Required 1. Propose a plan for each company to raise the needed cash. Which company should bor- row? Which company should issue stock? Consider the advantages and the disadvan- tages of raising money by borrowing and by issuing stock. and discuss them in your answer. Use the following memorandum headings to report your plans for the two com- panies: Plan for Franklin Corporation to raise $10 million Plan for Westchase Company to raise $10 million 2. How will what you learned in this problem help you manage a business?