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Please answer accordingly, thank you. Zymase is a biotech start-up with three mutually exclusive product concepts and $40m of capital to invest. Whichever project is
Please answer accordingly, thank you.
Zymase is a biotech start-up with three mutually exclusive product concepts and $40m of capital to invest. Whichever project is chosen will take one year, use all $40m in capital, and face equally likely random outcomes as shown in the table below. Suppose Zymase picks the project to maximize expected future cash flow to equity. Then ... a) If Zymase is funded with only equity and no debt, what is the expected cash flow to equity in one year? b) If Zymase's funding is only debt owed $40m in one year, what is the expected cash flow to equity in one year? c) If Zymase's funding is only debt owed $40m in one year, what is the expected cash flow to the DEBT in one year? d) If funding is $40m debt, what minimum amt should debtholders offer to forgive in exchange for picking the project? Project A B CapEx Low High Req'd 50% 50% E(FV) 30 100 -40 0 110 -40 70 70 -40 65 55 70 a) If Zymase is funded with only equity the expected cash flow to equity in one year is $ m. b) If Zymase is funded only by debt owed $40m, the expected cash flow to equity in one year is c) If Zymase is funded only by debt owed $40m, the expected cash flow to debt in one year is $ $m. m. Zymase is a biotech start-up with three mutually exclusive product concepts and $40m of capital to invest. Whichever project is chosen will take one year, use all $40m in capital, and face equally likely random outcomes as shown in the table below. Suppose Zymase picks the project to maximize expected future cash flow to equity. Then ... a) If Zymase is funded with only equity and no debt, what is the expected cash flow to equity in one year? b) If Zymase's funding is only debt owed $40m in one year, what is the expected cash flow to equity in one year? c) If Zymase's funding is only debt owed $40m in one year, what is the expected cash flow to the DEBT in one year? d) If funding is $40m debt, what minimum amt should debtholders offer to forgive in exchange for picking the project? Project A B CapEx Low High Req'd 50% 50% E(FV) 30 100 -40 0 110 -40 70 70 -40 65 55 70 a) If Zymase is funded with only equity the expected cash flow to equity in one year is $ m. b) If Zymase is funded only by debt owed $40m, the expected cash flow to equity in one year is c) If Zymase is funded only by debt owed $40m, the expected cash flow to debt in one year is $ $m. mStep by Step Solution
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