Eris plc is a fast growing company listed on the financial markets. Members of the Board have approved investment in an exciting opportunity for further growth. All of the directors are keen to move forward with the investment but there are different views on how it should be financed. Three financing strategies have been proposed for consideration:

Change the dividend policy from a $40\%$ pay$-$out policy to a zero dividend policy

Issue new equity via the stock market

Increase the level of debt in the capital structure from a D$/$E of $25\%$ to one of $100\%$

Critically evaluate each of the three financing proposals emphasising any key factors that the directors should consider.