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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
You own your own firm, and you want to raise $30 million to fund an expansion. Currently, you own 100% of the firm’s equity, and the firm has no debt. To raise the $30 million solely through equity, you will need to sell two-thirds of the firm. However, you would prefer to maintain at least a 50% equity stake in the firm to retain control.
If you borrow $20 million, what fraction of the equity will you need to sell to raise the
remaining $10 million? (Assume perfect capital markets.)
What is the smallest amount you can borrow to raise the $30 million without giving up control? (Assume perfect capital markets.)
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