We wish to start a company which would require an initial investment of SEK $500$ and would generate a cash$-$flow of SEK $625$ at the end of year $1,$ with probability $1,$ and no cash$-$flows thereafter.

However, we could also invest the funds in a project that requires the same initial investment of SEK $500,$ and that may pay out either SEK $750,$ with probability $0\mathrm{.}7,$ or SEK $0,$ with probabil$-$ity $0\mathrm{.}3,$ also at the end of year $1,$ and no cash$-$flows thereafter.

We have no own funds that we could invest in the company. All agents are risk$-$neutral, and the rate of return in the capital market is equal to $6\%.$ The financiers would be unable to monitor our use of the funds.

$3\mathrm{.}1.$ Would the financiers be willing to lend us the sum to be invested to start the company, at the nominal interest rate of $6\%?$

$3\mathrm{.}2.$ Would the financiers be willing to provide the sum to be invested to start the company in exchange for an equity participation, designed so as to yield to them a rate of return on $6\%?$ Dear Expert, kindly add comprehensive notes and calculations to your presentation. Thank you