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In March 1997, the chairman of the board of this small steel mill is pondering how to finance the growth of his firm: either with an initial public offering of equity or a private placement of eight-year senior notes with warrants. The task for the student is to sort out the comparative advantages and disadvantages of each alternative- including valuing the possible securities- and recommend a course of action. The objectives of the case are to (1) survey the main considerations in the basic choice between debt and equity financing (the case affords an application of the classic FRICTO [flexibility, risk, income, control, and timing] framework, as well as an opportunity for students to exercise their valuation skills); (2) consider the impact of financing on the value of the firm (the financial models permit the firm to be valued under alternative financing strategies); and (3) explore issues in financing the privately owned firm with regard to voting control, the decision to go public, and the role of private-placement financing. An Excel spreadsheet ''UVA-S-F-1211'' is available to accompany this case.