Mr. jodo looking for financing option,.

He zeroed for three options:

1. By taking up to $40 million on a 2-year bank credit agreement (@ the prime rate 11%) The balance
outstanding at the end of 2 years then would become payable in full at the end of the third year.
This option would require (a) a compensating balance of 10% of the line; (b) a minimum current
ratio of 2.0; (c) a minimum working capital position (current assets less current liabilities) of $80
million; (d) a maximum ratio of total debt (short- and long-term) to net worth of .5; and (e) a limit
on cumulative post-1974 dividends to 25% of cumulative post-1974 profit after taxes (excluding
any loss on sale of CPG).
2. A $30-million to $60-million issue of 25-year debentures at a coupon rate of 9.5%, non callable
except for sinking fund purposes for 10 years, with fully amortizing sinking fund payments
running from the sixth through the twenty-fifth year. Restrictions would be the same as under
the bank credit agreement, with minor variations.
3. By issuing $30-million to $45-million common stock issue at an estimated price of $30 per share
with net proceeds to the company of $27 per share (current stock price, $32).