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Hey can someone help me with this problem please. You own a firm, and you want to raise $30 million to fund an expansion. Currently,
Hey can someone help me with this problem please.
You own a firm, and you want to raise $30 million to fund an expansion. Currently, you own 100% of the firm's equity, and the firm has no debt. To raise the $30 milion solely through equity, you will need to sell two-thirds of the firm However. you would prefer to maintain at least a 50% equity stake in the firm to retain control. a. If you borrow $20 million, what fraction of the equity will you need to sell to raise the remaining $10 milion? (Assume perfect capital markets.) b. What is the smallest amount you can borrow to raise the $30 million without giving up control? (Assume perfect capital markets.) a. If you borrow $20 million, what fraction of the equity will you need to sell to raise the remaining $10 million? (Assume perfect capital markets) If you borrow $20 million, to raise the remaining $10 million you will need to sell th of the equity. (Round to one decimal place) b. What is the smallest amount you can borrow to raise the $30 milion without giving up control? (Assume perfect capital marks.) The smallest amount you can borrow to raise the $30 milion without giving up control is $ milison. (Round to one decimal place.) Step by Step Solution
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