Question
You are a 5% shareholder in Company XYZ, Inc. The company is planning to expand operations and is seeking sufficient funding to support this expansion
You are a 5% shareholder in Company XYZ, Inc. The company is planning to expand operations and is seeking sufficient funding to support this expansion project. The company is deciding between issuing bonds or issuing new shares of common stock to obtain the desired funding. Discuss the advantages of each and the disadvantages of each from your perspective as a shareholder. Include the impact to the accounting equation (assets, liabilities and shareholders equity), address such risks as increased debt, cash flows needed for interest, repayment of debt, increased number of shares outstanding, and impact to EPS (to name a few risks).
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