Tuily Co is a listed company that manufactures a grtcuitural machinery. It is currently In relation to option 3, which type of Islamic finance would be the most sultabie tor Tully Co? finencod by a mixture of ordinary shares and 8% irredenmable proforence shanes with a nominal value of 50.25 per share. Musharaka Tully co needs to raise $20m to finance a new production plant. Sukuk Tally Co's equity beta is currentiy 1.2 and the market risk premium is 4.5%. Shor- Mudaraba dated government seccurilies have a yield of 4% The annual dividend on its preference shares is about to be paid and the sharea are currently quoted at $0.30 cum div. Tuily 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. Option 2 is to not pay an ordinary share dividend, which is due to be announced in ix months' tirne. The chairman, however, was concemed about the effect this option ould have on the share price. plion 3 is to make use of Islamic finance. It was agreed that if this option is chosen, leeds to be similar to a form of equity financing, but not entitle the finance provider any particjpation in managernent