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You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $ 3 0 million. If your
You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $ million. If your research is unsuccessful, it will be worth nothing. To fund your research, you need to raise $ million. Investors are willing to provide you with $ million in initial capital in exchange for of the unlevered equity in the firm. Suppose instead that you borrow $ million. According to MM the fraction of the firm's equity that you will need to sell to raise the additional $ million is
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