Question 2 2.1 Madeira has an ambitious plan to invest 1 billion AED in the next 5 years. Explain how the company might fund such an ambitious investment plan. You are

required to evaluate the benefits and drawbacks of equity finance and debt finance from the company's perspective. (10 marks) 2.2 Summarise the (theoretical) costs of each type of finance available to the company when funding its investment appraisal in the future. What are the relative costs of retained earnings compared with raising new finance via the financial markets.