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XYZ Company, an unquoted manufacturing company, has been experiencing a growth in demand, and this trend is expected to continue. In order to cope with

XYZ Company, an unquoted manufacturing company, has been experiencing a growth in demand, and this trend is expected to continue. In order to cope with the growth in demand, the company needs to buy further machinery and this is expected to cost 30% of the current company value. In the past, a high proportion of earnings has been distributed by way of dividends so few cash reserves are available. 51% of the shares are still owned by the founding family. A decision must now be taken about how to raise the funds. The firm has already raised some loan finance and this is secured against the company land and buildings. 


 Suggest possible ways to raise fund in this case and highlight the issues that should be taken into consideration.

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Equity Financing Issue New Shares The company can issue new shares to raise equity capital Founding Family Given that 51 of the shares are owned by th... blur-text-image

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