3.- Vesta recently announced the purchase of the Apolo portfolio for P $ 16,000 mn. The CFO of Vesta asks for your recommendation between issuing equity or issuing debt for the acquisition of the portfolio. Currently the company has no debt.

SELECT THE CORRECT OPTION

a) When issuing debt, the discount rate will go down, thus raising the value of the company; while if it issues capital there will be a dilutive effect for the shareholders. Similarly, returns must go up.

b) When issuing debt the discount rate will go down, therefore raising the value of the company; while if it does not issue capital there will be a dilutive effect for the shareholders. Similarly, returns must go up.

c) Earnings per share should go down whether it issues debt or issues equity.

d) Any of the options must mean an issuance expense.