Tuilly Co is a listed company that manufactures agricultural machinery. It is currently Which TWO of the following theorles would support the chairman's concerns regarding option 27 a lisied company ordinary shares and 8% irredeemable preference shares Strong form market efficiency with a nominal value of $0.25 per share. Tully Co needs to raise $20m to finance a new production plant. Dividend irrelevancy Tully Co's equity beta is currently 1.2 and the market risk premium is 4.5%. Shertdated government securities have a yield of 4% The annual dividend on its preference shares is about to be paid and the shares are currently quoted at $0.30 cum div. Tully Co pays corporation tax at a rate of 30%. Three financing options for the $20m required are under consideration. Option 1 is a rights issue at either a 20% or 30% discount to the current share price. Dption 2 is to not pay an ordinary share dividend, which is due to be announced in ix months' time. The chairman, however, was concemed about the effect this option ould have on the share price. ation 3 is to make use of Islamic finance. It was agreed that if this option is chosen