Markus Corporation is embarking on an ambitious venture which requires an investment of about 50 million dollars. The CFO believes that the company should raise funds by issuing debt. However, some other members of the senior management team insist that raising funds from the stock markets is a better idea.
Which of the following, if true, would strengthen the CFO's argument?
A. The new venture has a payback period of fifteen years, within which the investment will be recouped.
B. Bond prices in the economy have been falling over the years due to changes in monetary policy.
C. Existing investors are opposed to the idea of dilution of ownership.
D. The cash flows from the project are too volatile to guarantee periodic payments.
E. The company has sufficient cash cushion to fund the project from internal accruals.
