Financial Situation:

a) The project requires $10 million in capital.

b) Company has $3 million in cash reserves, but they need an additional $7 million to fund the project.

c) The company's management is deciding between issuing bonds and issuing common shares to raise the needed capital.

What are the risks associated with each financing option and how does the company's risk tolerance influence their decision between issuing bonds and issuing common shares to finance the project?