2. Suppose that you are the financial manager of Gulf Electronics Company. The CEO has requested you to write a proposal on how to finance an extension of a new production plant, which is expected to cost 10 million dirhams. The balance sheet of the company shows that the company is currently servicinga 5 years debt from ADCB bank and other loans from bond issue and several lenders, paying nearly 200,000 dirhams per year in interest. The current debt to asset ratio of the company is 0.55 Required? A. Should the company use bond or stocks to finance its project and why? What is your recommendation to the company? 4 points . A financial advisor has just given you the following advice: "Long-term bonds are a great investment because their interest rate is over 20%." Is the financial advisor necessarily correct? 2 points 4. The global credit market in aggregate is about 3 times the size of the global equity market. Several companies in the glob significantly rely on bond financing. Required? A. Why do you think bond financing is widely used source of finance compared to equity? 4 points B. Who are the participants in the bond market? 2 points C. Why companies issue bonds? 2 points