Recall that Carson Company has obtained substantial loans from finance companies and commercial banks. The interest rate on the loans is tied to market interest rates and is adjusted every six months. Thus, Carson's cost of obtaining funds is sensitive to interest rate movements. Given its expectations that the U$.$S$.$ economy will strengthen, Carson plans to grow in the future by expanding and by making

acquisitions. Carson expects that it will need substantial long$-$term financing to pay for this growth, and it plans to borrow additional funds either through existing loans or by issuing bonds. The company is also considering the possibility of issuing stock to raise funds In the next year