Tully Co is a fisted company that manufachures agricultursl machinery. If is currently In relation to option 1 , which TWO of the following statements are TRUE? financed by a mixture of ordinary shares and 8% imedeemable preference shares with a numinal value of $0.25 ner share. The discount af 30% will result in a groater number of shares having to be issued compared with the 20% discount Twily Co needs lo raise $20m to finance a new production piant. Tuliy Co's equily bela is cumently 1.2 and the market risk premium is 4.5%. Shortdated govorment securities have a yleld of 4% The annual dividend on its preference shares is about to be paid and the shares are currently quoted at $0.30 cum diy. 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. Option 2 is to not pay an ordinary share dividend, which is due to be announced in six months' time. The chaiman, 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, needs to be similar to a form of equity financing, but not entitle the finance provider any participafion in management