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)In the year 2016 ABC company is in need of extra funds of $500,000. Ithas three options( sharecapital, debt securities or a mix of both).

)In the year 2016 ABC company is in need of extra funds of $500,000. Ithas three options( sharecapital, debt securities or a mix of both). Details of options available to the company are given in the following table:

Net Income for 2016 before interest is $300,000, tax rate applicable for 2016 is 40%.

Required:

Based on the above Information, which option company should go with? Explain why?

Preference share for 0ption 1

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