You own a firm, and you want to raise $35 million to fund an expansion. Currently,...

 

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You own a firm, and you want to raise $35 million to fund an expansion. Currently, you own 100% of the firm's equity, and the firm has no debt. To raise the $35 million solely through equity, you will need to sell two-thirds of the firm. However, you would prefer to maintain at least a 50% equity stake in the firm to retain control a. If you borrow $15 million, what fraction of the equity will you need to sell to raise the remaining $20 million? (Assume perfect capital markets) b. What is the smallest amount you can borrow to raise the $35 million without giving up control? (Assume perfect capital markets.) a. If you borrow $15 million, what fraction of the equity will you need to sell to raise the remaining $20 million? (Assume perfect capital markets.) If you borrow $15 million, to raise the remaining $20 million you will need to sell % of the equity (Round to one decimal place.) You own a firm, and you want to raise $35 million to fund an expansion. Currently, you own 100% of the firm's equity, and the firm has no debt. To raise the $35 million solely through equity, you will need to sell two-thirds of the firm. However, you would prefer to maintain at least a 50% equity stake in the firm to retain control a. If you borrow $15 million, what fraction of the equity will you need to sell to raise the remaining $20 million? (Assume perfect capital markets) b. What is the smallest amount you can borrow to raise the $35 million without giving up control? (Assume perfect capital markets.) a. If you borrow $15 million, what fraction of the equity will you need to sell to raise the remaining $20 million? (Assume perfect capital markets.) If you borrow $15 million, to raise the remaining $20 million you will need to sell % of the equity (Round to one decimal place.)

Answer rating: 100% (QA)

a If you borrow 15 million you would only need to raise 20 million through equity To maintain at lea... View the full answer