The director’s assessment of the financial decision has received varying responses. While bond interest and principal payments are fixed over 15 years, the dividend payout is a residual payment made at the discretion of management. Shareholders would not be satisfied with a constant dividend of $1.00 per share every year without any appreciation in share price. On the other hand, bond options could offer shareholders a better return for lower risk in Winfield’s debt.

The board has different opinions and must consider the risks associated with issuing debt. With the current market conditions, Winfield’s debt could be risky and could lead to significant fluctuations in stock prices. The debt option could also lead to an increase in long-term liabilities.

Issuing equity may lead to significant dilution of management control, which could be a huge gift to the new shareholders at the expense of the existing ones. The dilution of EPS, which could amount to $1.91 per share, should also be taken into consideration.

Ultimately, the board and management team need to weigh all the factors and come to a decision that would benefit the company and its shareholders in the long run. With the right financial decision, Winfield could capitalize on its expansion opportunities and maintain its competitive edge in the waste management industry.

The bond issuance would result in yearly financial outlays of $14.375 million, including $8.125 million in interest payments and $6.25 million in principal repayments. The common stock issuance would result in yearly cash outlays of $7.5 million, including dividends, underwriting fees, and other costs.

The yearly principal payments for the bond issuance would be $6.25 million, in addition to an annual interest payment of $8.125 million at a rate of 6.5%. This would result in a continuous need for cash, but since bond interest payments are tax deductible, the debt’s net cost is equal to 4.225% after taxes.

For the common stock offering, 7.5 million shares would be issued at a price of $17.75 per share, less underwriting costs and fees. This would result in net revenues of $16.67 per share and a dividend payment of $1.00 per share, totaling a $7.5 million yearly cash expenditure.