Minnories Ltd is a small company which has experienced good growth in the last 5 years. Sales revenue has
increased from a modest £22,000 to £6m with profit hitting £2m. The owners have invested all their available funds to support the growth of the company. The directors have highlighted a new potentially very profitable venture which would require £15m of new funds.
The company's Board of Directors is considering three possible routes to securing the finance, these being the flotation of the company on the official list of the London Stock Exchange; venture capital, and long term redeemable bonds. (Please note that the current statement of financial position (balance sheet) indicates a gearing ratio of 33%, which is equivalent to a debt equity ratio of 50%).
As a financial advisor to the Board you have been asked to compose a report which gives a balanced view of the three options available in order that the Board may come to a decision on the most appropriate source of funding.