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PLEASE WRITE IN DETAILS (500-800 words) Question 2 If the economy continuous to be strong, a company such as Alba Aluminum of Bahrain may need to increase its production capacity by 50% over the next few years to satisfy demand. It would need financing to expand and accommodate the increase in production. Keep in mind that the yield curve is currently upward slopping. Similarly, Alba is concerned about slowing down of the economy because of potential Central Bank actions to reduce inflation. Alba also considering issuing stock or bonds to raise funds in the next year. a. If Alba issued stock now, it would have the flexibility to obtain more debt and would also be able to reduce its cost of financing with debt? Why? b. Why would an IPO result in heightened concerns in financial markets about Alba company potential's agency problem? c. Explain why institutional investors such as mutual funds and pension funds that invest in stock for long-term periods might prefer to invest in some IPOs than to purchase other stocks that have been publicly traded for several years