Elliot is considering how to fund a new project recently approved by management. He has determined the following 4 options are available. Discuss the procs and cons of each option as it relates to both the firm and potential (current and future) investors. Current WACC is 12.5%, cost of equity is 15%, cost of debt is 7%.

A) Issue new common stock.

B) Issue 5 year, 7% coupon bonds.

C) Issue 5 year convertible bonds (6% coupon rate), which can be converted to 15 shares of the firm's stock, whose current price is $45.

D) Issue 5 year callable bond (6% coupon) with a call price of $1050.