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all parts pls You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $30 million. If
all parts pls
You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $30 million. If your research is unsuccessful, it will be worth nothing. To fund your research, you need to raise $3.3 million. Investors are willing to provide you with $3.3 million in initial capital in exchange for 50% of the unlevered equity in the firm, a. What is the total market value of the firm without leverage? b. Suppose you borrow $0.7 million. According to M&M, what fraction of the firm's equity will you need to sell to raise the additional $2.6 million you need? c. What is the value of your share of the firm's equity in cases (a) and (b)? GOD Step by Step Solution
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