SECTION C: SOURCES OF FINANCE Pets4sure Ltd is a private limited company which was incorporated in Jan 2015 by 3 partners. The business has grown steadily and has developed a good reputation for the selling pet insurance online. The company is now having to make some major business decisions as it is planning to expand its operations due to increased popularity in pet owners. The partners also have the opportunity of taking over a major competitor but they would need to raise 2million. The business currently has a few bank loans at present which could be extended due to the excellent credit rating of the company. However, one of the partners has suggested that this is the time for the firm to 'go public' and raise the money through share issue. 1. Define the terms: Public limited company ii. Share issue [4 marks] 2. Outline debt financing and equity financing as two possible sources of long-term finance available to Pets4sure. [4 marks] 3. Explain why an expansion in Pets4sure's customers has increased the need for finance. [4 marks] 4. Evaluate the view that Pets4sure' decision to raise long-term finance by 'going public' is preferable to raising it through borrowing. [8 marks]