6. Venture capital (S14.1) Look at Marvin’s first attempt to raise financing. (Refer to Section 14.1 and the Marvin Prospectus in the appendix at the end of this chapter.) Suppose that First Meriam decides that Marvin’s shares are worth only $0.80 each.

a. How many shares will Marvin need to sell to raise the additional $1 million?

b. What fraction of the firm will Marvin’s managers own after the VC investment?