a. What are the prospects for a PE that overleverages due to cheap funding sources?

b. What are the pros and cons of becoming a public company?

c. Suppose that Lululemon raises $2 million in series A financing for 5 million shares and 25 percent of the company and keeps 75 percent ownership. Another round of financing, series B, funds another $3 million for 3 million shares. Calculate the percentage ownership of series A investors if they do not participate in series B financing, and they have the following anti-dilution provision in their contract:

1. Full-ratchet anti-dilution
2. Weighed average anti-dilution