Ports, Ltd. is algorithm for ports management to be sold to shipping companies. They spent 25,000 researching and collecting intelligence before deciding to go ahead with this project. The partnerships business model is characterized by starting up the project and, after 6 years, selling it to other investors or through an initial public offering (IPO). The expected market value would be 2,050,502, considering it is fully financed by equity. The two college friends have not decided yet on how to finance it. They are considering the pros and cons of the financing mix for the company.

Scenario 1 is to issue 1 million shares worth 1 each, and no debt at all. Nevertheless, because they are so confident about the project, another scenario

Questions about Scenario 1 a) What is CaliforniaPorts equity cost of capital? b) What is CaliforniaPorts value per share?