(a) Why does a start-up company normally resort to equity capital as opposed to debt capital in funding its investments and operations? (2 marks) (b) Venture Capital (VC) firms often use the relative valuation method to value startup companies. For example, a VC that invested in a pharmaceutical start-up A developing vaccines would use the average price-to-earnings (PE) ratio of public-listed pharmaceutical companies such as Pfizer, AstraZeneca, and Johnson&Johnson. Suppose the current average PE ratio for pharmaceutical companies is equal to 30, and this start-up is expected to generate a total of $10 million in profits in 2024, what is the valuation for this start-up? In your opinion, what are the main advantage(s) and disadvantage(s) of this relative valuation method? (4 marks) (c) Based on what we have learned in this unit, what would be an alternative valuation method to value start-ups? (1 mark)