Question 2. 30% For the project assigned in Fin450, a number of students selected a money losing negative cash-flow Pharmaceutical Bio-Tech firms. If we use the traditional DCF model the value of the firm will be negative, yet all have positive market values. How do you explain the positive valuation of these type of firms? How would you value these firms? Question 3 40%. In their calculation of the optimal capital structure many of your colleagues had high equity OCS results such as 60% or higher. Others, recommended lower equity OCS such as 20% or lower. Asuming there calculations were error free, can you explain want company characteristics might explain the different results? 7:58 PM Question 2. 30% For the project assigned in Fin450, a number of students selected a money losing negative cash-flow Pharmaceutical Bio-Tech firms. If we use the traditional DCF model the value of the firm will be negative, yet all have positive market values. How do you explain the positive valuation of these type of firms? How would you value these firms? Question 3 40%. In their calculation of the optimal capital structure many of your colleagues had high equity OCS results such as 60% or higher. Others, recommended lower equity OCS such as 20% or lower. Asuming there calculations were error free, can you explain want company characteristics might explain the different results? 7:58 PM