Lakes, Oceans Rivers and Canals Ltd (LORC) builds luxury houseboats. The entity needs funds for expansion. It could take out a fixed rate or variable rate business loan over say 25 years. Another alternative is issuing new shares to investors in the form of a rights issue. Explain the issues relating to these different forms of finance. In your answer refer to current interest rates relating to fixed and variable rate loans and also what the potential costs are of offering shares via a rights issue. What other factors relating to LORC Ltd need to be taken into account in order to arrive at the best decision for the company?