Jensen & Jensen Incorporated, a telecommunications equipment manufacturer, has a debt to total assets ratio of 55%, while competing companies of similar size operating in the same industry have an average debt to total assets ratio of 62%. Jensen & Jensen is planning to expand its operations by adding two new plants next year. Jensen & Jensen currently is privately owned by the Jensen brothers, and they would like to keep the company closely held, but will issue shares if necessary.
(a) Discuss three sources for financing the expansion.
(b) Recommend the most suitable source of financing for Jensen & Jensen, based on the information provided.