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Corporate Funding Strategy Analysis
A private company needs to finance the construction of a new factory. The original owners want to retain full control over all business decisions and keep all future profits for themselves. The company is considering three options to raise the necessary funds: taking out a bank loan, issuing a formal IOU to the public that pays a fixed interest rate, or selling small ownership stakes to new investors.
Based on the owners' specific priorities, which of these three funding methods is the least suitable? Justify your choice by explaining the fundamental trade-off this method would force the owners to make.
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Corporate Funding Strategy Analysis
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