Carys Caravans Ltd builds luxury caravans. The entity needs funds for expansion and has a choice of debt finance over approximately 20 years or equity finance by issuing additional shares to investors.

Explain the issues relating to these two different forms of finance.

Ensure in your answer to discuss interest rates, fixed and variable loans as well as the potential costs of offering shares via a public float.

Finally, given consideration to any other factors the Carys Caravans Ltd need to take into account in order to determine the most appropriate decision for their company.