Eastern Entertainment Enterprises (EEE) is a large public real estate company owning apartment units catering to young college students. EEE plans to raise $100 million to build three large apartment units to rent to students at a nearby university. The CFO of the company asked you to prepare a preliminary powerpoint presentation for the Board of Directors outlining three financing options available to the company: (1) private placement of bonds, (2) issuing preferred stock, or (3) issuing common stock.

First, explain the type of forecasting data you would like to include in the presentation. Why is it important to include financial ratio analysis of EEE in your presentation?

Second, provide a general outline of the steps to be taken for each option, as well as the costs, benefits, and risks inherent in each option.

Might you take a risk and prepare a fourth option for the CFO that will include a mix of the above options? Why, or why not?