You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $ 30$30 million. If your research is unsuccessful, it will be worth nothing. To fund your research, you need to raise $2.02.0 million. Investors are willing to provide you with $2.02.0 million in initial capital in exchange for 50 %50% of the unlevered equity in the firm. a. What is the total market value of the firm without leverage? b. Suppose you borrow $1.01.0 million. According to MM, what fraction of the firm's equity will you need to sell to raise the additional $1.01.0 million you need? c. What is the value of your share of the firm's equity in cases (a ) and (b ) ? a. What is the total market value of the firm without leverage?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $ 30$30 million. If ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
When the 2008 financial crisis began in the united states, it resulted in the collapse of the housing market and the failure of several large financial institutions. this crisis spread rapidly to the rest of the world.
Answers (1)
Cotton Brokers, Inc., enters into a contract to sell denim clothing to Delite Natural Fashion store, which in turn sells a pair of jeans to Esmé, a consumer. In comparison to standards that apply to consumers, the UCC imposes on merchants A.
Answers (1)
If you made a deposit of $12,500 in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (Do not round intermediate calculations and round your answer to 2 decimal places (e. g., 32.16).)
Answers (1)
O to save the environment Personal qualities are responsibility, self esteem, sociability, self management, integrity and honesty. O True False Most new jobs will be in
Answers (1)
Bayram had the opportunity to choose between two investments. The first investment was described as having a 30% chance of succeeding, while the second investment was described as having a 70% chance of failing.
Answers (1)
New Questions in Business
Time is an important factor when evaluating a managed mutual fund for which of the following? a. The length of time that the present fund manager has been managing the fund. b. None of these. c. The existence of the underlying index. d.
Answers (1)
Greg purchased stock in Bear Stearns and Co. at a price of $88 per share one year ago. The company was acquired by JP Morgan at a price of $11 per share. What is Gregʹs return on his investment? A) - 87.50% B) - 113.75% C) - 100.62% D) - 96.25%
Answers (1)
Will and bill both enjoy sunshine, water, and surfboards. thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in california.
Answers (1)
Jones Company uses the weighted-average method in its process costing system. The Packaging Department started the month with 400 units in process that were 70% complete, receiving 2,500 units from the Cutting Department.
Answers (1)
Newspaper 14 think and review
Answers (1)