Answer all the questions

QUESTION FOUR HomeStyle Furnishingsis a newly established domestic company specializing in crafting bespoke furniture pieces. Itis a privately held company co-founded by JaneMwaleand Mark Malambo. Jane, with her background in interior design, oversees product design and customer relations. Mark, a skilled carpenter, manages the manufacturng process and ensures product qualty. The company takes pride in its commitment to sustanability, using locally sourced materias and eco-friendy production practices The company has also quickly gained recognton for ts hgh-quaity craftsmanship and unique desgns. HomeStyle Furnishingsis poised for growth and expansion, with increasng demand for its artisanal furniture pieces.Itis at a critical juncture, as it seeks external fnancing to fuel its growth and expansion plans.The company would lke toexpandproduction capacty to meet the growng demand for furniture by investingin additiona machnery, equipment, and facilities to increase its manufacturng capabilties at a cost of k2,000,000kwacha.Tosupport this expansion, the company is consdering external financing options. While both equty and debt financing are on the table, there are compeling reasons why debt financing might be the more advantageous choice. The followng are the other details of the company: Ownership Structure JaneMwae: 60% ownership Mark Malambo: 40% ownership Financial Situation As of the present, HomeStyle Furnishings has accumulated retained earnings worth k500, 000. Additionally, the company holds a 5 yearloan wth a maturity date n six months.

REQUIRED: i) Discuss what formof businessHomeStyle Furnishingsis and highlght five (5) advantages of this busness structure.(5 marks) ii) Discuss the reasons HomeStyle Furnshingswould Choose Debt Fnancingover Equity financing (5 marks) iii) What would be the underining reasons HomeStyle Furnishingswould choose equityfinancingover debt financinginstead(5 marks) iv) If a world renowned international furnture company would like to take over HomeStyle Furnishings, what chalenges would this company face in ensuring a successful take over (5 marks) (TOTAL:20 MARKS)