Jet example

Contribute: Provide one or two solutions along with your explanations. Students are welcome (and encouraged) to discuss and share ideas with colleagues. Your grade will be based on your participation in the discussion, but not on the substance of your answer. Consider again the situation of the jet-loving CEO of $50 million all-equity company, assuming (again) that the jet has a negative NPV of $1.5 million, but that the CEO personally values the jet at $1 million. Suppose that the CEO, who initially owns 100% of the equity, decides to sell 40% of her shares to the public. How much cash can she raise by selling 40% of her equity? This must be completed before moving on to the next page