MMI Accessories Ltd needs to raise 50,000 of additional financing to buy a delivery van and some fixtures. MMI Accessories Ltd is considering three options: 

Option 1: Get an 8% bank loan of 50,000. This may need to be secured on non-current assets worth 50,000. 

Option 2: Try to persuade Lina to buy 50,000 of newly issued shares. 

Option 3: A rights issue of 1-for-10 ordinary shares to the existing shareholders at a price of 1.20p per share fully paid up. Note relating to Option 3: Assuming that all three shareholders take up the rights issue, this would lead to an increase in financing of 48,000 (400,000 shares/10)  1.20). The remaining 2,000 could be paid out of the company's cash