P7-44A OUTBACK SPORTING GOODS IS EMBARKING ON A MASSIVE EXPANSION. ASSUME PLANS CALL FOR OPENING 20 NEW STORES DURING THE NEXT TWO YEAR. EACH NOTE IS SCHEDULED TO BE 50% LARGER THAT THE COMPANY EXISTING LOCATIONS, OFFERING MORE ITEMS

OF INVENTORY, AND WITH MORE ELABORATE DISPLAYS. MANAGEMENT ESTIMATES THAT COMPANY OPERATION WILL PROVIDE $1 MILLIONS

OF THE CASH NEEDED FOR EXPANSION. OUTBACK MUST RAISE THE REMAINING $6MILLIONS FROM OUTSIDERS. THE BOARD OF DIRECTORS IS CONSIDERING OBTAINING THE $6 MILLIONS EITHER THROUGH BORROWING OR BY ISSUING COMMON SHARES.

REQUIREMENT

WHITE MEMO TO OUTBACK MANAGEMENT DISCUSSING THE ADVANTAGES AND DISADVANTAGES OF BORROWING AND OF ISSUING

COMMON SHARES TO RAISE THE NEEDED CASH. WHICH METHOD OF RAISING THE FUNDS WOULD YOU RECOMMEND?