what the difference between financing a company with debt meyer company and with equity haugen company? how does it impact the finance as reflected in the balance sheet?

2-6 TICI SI months. MMM's stock currently sells for $26 per share. ULJ per Share anytime during the a. Should you exercise the option and sell the stock to the option writer (seller) if the stock price stays at $26 per share? b. Should you exercise the option if the stock's price increases to $30? What would be your gain (loss) if you bought the stock at $30 and then exercised the option? C. Should you exercise the option if the stock's price decreases to $20? What would be your gain (loss) if you bought the stock at $20 and then exercised the option? Two textile companies, Meyer Manufacturing and Haugen Mills, began operations with identical balance sheets. One year later, both required additional manufacturing capacity, which could be obtained by purchasing a new machine for $200,000. To raise the needed funds, Meyer issued a five-year, $200,000 bond with a coupon rate equal to 8 percent. Haugen, on the other hand, decided to sell common stock to raise the $200,000. The stock was sold for $50 per share, and the issue increased the number of outstanding, or existing, shares by 20 percent from the pre-issue level. All previous issues of stock were sold for $50 per share also. The balance sheet for each company, before the asset increases, is as follows: Debt $200,000 200,000 Equity Total assets $400,000 Total liabilities and equity $400,000