You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $100,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.40 each.
a. How many shares will you need to sell to raise the additional $1,370,000?
b. What fraction of the firm will you own after the VC investment? (Round your answer to 1 decimal place.)
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