Anita sought to raise $10 million in private placement of equity in her early stage Internet company. She projected net income of $15 million in year 5 and knew that comparable companies traded at a price range of 15 times earnings (i.e. multiple of 15). She approached Mr. Radachovic of Alliance Capital about an investment.

What share of the company would Mr. Radachovic require today if his required rate of return (RRR) were 50%