You Have a Project That Will Require You to Raise

question 37

Multiple Choice

You have a project that will require you to raise $1 million. The NPV of the project is $10 million. If potential equity investors believe that you will behave opportunistically and award
Yourself an excessive of $500,000, how much of the firm will you have to sell in order to raise
The needed funds with new equity? Round your answer to the nearest tenth of a percent.

• A)15.1%
• B)5.0%
• C)10.5%
• D)10.0%