P15-7B Research indicates that consumers prefer upscale restaurants. To capitalize on this trend, Palomino Eurobistros. Inc., is embarking on a massive expansion. Plans call for open- ing 20 new restaurants within the next two years. Each restaurant is scheduled to be 30% larger than the company's existing locations and feature upgraded menus. Management esti- mates that company operations will provide $3 million of the cash needed for expansion. Palomino must raise the remaining $1.5 million from outsiders. The board of directors is con- sidering obtaining the $1.5 million either through borrowing or by issuing common stock.. Required 1. Write a memo to company management. Discuss the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash. Use the following for- mat for your memo: Date: Management of Palomino Eurobistros, Inc. To: From: Student Name Subject: Advantages and disadvantages of borrowing versus issuing stock to raise $1.5 mil- lion for expansion Advantages and disadvantages of borrowing: Advantages and disadvantages of issuing stock: 2. How will what you learned in this problem help you manage a business?