The FCC has dictated a series of "elections", city by city, starting in 1984 and concluding in 1987. In each election, every customer will be sent a ballot and asked to return it with a selection of a long-distance carrier. Despite heavy advertising by long-distance companies, only 15%-30% of customers are expected to return their ballots. The nonvoting market share will be allocated in the proportions determined by those voting. MCI's future will be determined by its success in this electoral process - this is a unique opportunity for MCI to grow market share. 1. Estimate the amount of external financing MCI requires until the end of 1987 (i.e. the 4 year election period). How much might you expect it to vary? Why? Hint: I suggest providing an estimate based only on the information in Exhibit 9A. Exhibit 3 might also give you an idea how to do this, but it contains some items that are missing from Ex.9 - assume they are zero. 2. Discuss MCI's past financial strategy, paying attention to the types of securities issued. Why do you think that MCI chose each type of financial security at each point in its past? 3. Based on your analysis of the outlook for MCI (given the competitive and regulatory nature of the industry), recommend a capital structure policy, and defend your decision against plausible alternatives. This is a conceptual (not a numerical) question.