Tampa Consolidated has total assets of $100 million and needs $50 million for a major expansion. Management estimates that the expansion. Management estimates that the expansion will increase net operating income by $9 million a share, and investors are aware of this profitability. Tampas existing balance sheet and income statement appear below. The interest rate on new debt will be 10%. What type(s) of financing do you recommend?

Net operating income		15,000
Interest		2,000
Earnings before tax		13,000
Total assets		100,000
A/P		20,000
LT Debt		20,000
Equity		60,000

		Year1	Year2	Year3	Year4	Year5
Debt to total assets		0.33	0.37	0.41	0.43	0.45
Times interest earned		8.53	7.74	7.64	7.85	5.31
Weighted avg. costs of capital		14.38	13.49	13.27	13.27	15.51