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We wish to start a company which would require an initial investment of SEK 5 0 0 and would generate a cash - flow of
We wish to start a company which would require an initial investment of SEK and would generate a cashflow of SEK at the end of year with probability and no cashflows thereafter.
However, we could also invest the funds in a project that requires the same initial investment of SEK and that may pay out either SEK with probability or SEK with probability also at the end of year and no cashflows thereafter.
We have no own funds that we could invest in the company. All agents are riskneutral, and the rate of return in the capital market is equal to The financiers would be unable to monitor our use of the funds.
Would the financiers be willing to lend us the sum to be invested to start the company, at the nominal interest rate of
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 Dear Expert, kindly add comprehensive notes and calculations to your presentation. Thank you
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