Using the equity stake equation, if a business owner needed to raise $250,000 in equity and the company is worth $1,000,000, how much (what percentage) of the company would the owners have to give up if the growth rate is 15% and they expect to completely sell out in 5 yea

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation
Section: Chapter Questions
Problem 9MC
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Using the equity stake equation, if a business owner needed to raise $250,000 in equity and the company is worth $1,000,000, how much (what percentage) of the company would the owners have to give up if the growth rate is 15% and they expect to completely sell out in 5 years?

 
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