b$)$ The directors of Mino were debating on whether to use debt or

equity in future financing strategies of the business. The

family members, however, do not wish to bring in additional

equity finance in the firm. This implies that the equity capital

will either be raised from issuing shares to outsiders or

retained earnings $($cutting down dividend$).$

MBS$,$ the Marketing Director, feels that debt financing

will be quick and easier to raise due to the availability of

company assets to use as collateral. He believes that

despite the expected increase in financial risk, debt

option will quicken the implementation of future capital

projects and therefore, no reason to worry.

Nathanael, the Human Resources Director feels that debt

finance will expose the business to greater risks. The

director thinks that equity would be the best option in

that they can issue as many shares as possible since they

are issuing to outsiders. The HR directors think that

raising equity finance through issuance of shares has no

limitations$.$

As a consultant to the family, write a report in which

you discuss the current position of the family in the

company and the likely impact of their refusal to

participate in further equity financing. To be included

in the report is your reaction to the views of the two

directors $($Marketing and Human Resources$)$ who are

both family members.