You are the CEO of a publicly traded company that needs to raise $200 million in long term capital. Your Total Assets are now $1 billion and your debt is 35% of total capital. Your market direct cost of debt is 4% (interest) and your market direct cost of equity is 3% (dividends). Your business is in the 21% tax bracket. You need the capital because of expanding production requirements driven by sales.

1) What considerations must you make in determining how to raise the capital?

2) What is the process for issuing debt?

3) What is the process for raising equity?