Please find the file attached. Please be specific when answering the questions and show ALL YOUR WORK, in details when discussing the pros and cons of each method and provide necessary calculations to

Please find the file attached. Please be specific when answering the questions and show ALL YOUR WORK, in details when discussing the pros and cons of each method and provide necessary calculations to support the position you recommend..

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JumpinJehosaPhats was incorporated on January 1, 2012 and a year later it needs $10,000,000 to
expand operations.
JJ Phats is the sole shareholder of the corporation.
The corporation is considering three methods to raise the capital:

issuing common shares at FMV

issuing preferred stock with par = $1000

issuing 10 year bonds with par =
$1000
You have been hired to determine the best way for the company to obtain the funds needed
which might be a single method or combination of methods.
Using the following
information, discuss the pros and cons of each method and provide necessary calculations
to support the position you recommend.

The company is authorized to issue 1,000,000 shares with a par value of $1.00

On January 1, 2013 an appraisal of the company indicates that it has a current value of
$25,000,000.

On January 1, 2013 current interest rates are 3.5% APR and rising.

On December 1, 2012 the competition (LeapinLizards Inc) issued 10,000 ten year
cumulative preferred shares with par = $1000 at 3.4%

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