A company has identified potential profitable investments that would require a total of S50 million capital expenditure over the next two years The following information is relevant.

• The company has 100 million shares in issue and has a market capitalisation of S500 million

• It has a target debt to equity ratio of 40% based on market values This ratio is currently 30%

• Earnings for the current year are expected to be S1 00 million

• Its last dividend payment was $1 per share One of the company's objectives is to increase dividends by at least 10% each year

• The company has no cash reserves

Which of the following is the most suitable method of financing to meet the company's requirements?