Should invest if know is successful

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Problem 1: We are deciding to invest in a company that is either successful or mild. the company needs 15 dollars to fund its investment. if it is successful then there is an 80%chance that it will yield $150 and 20% chance of yielding $10. If it is mild, it has a 10% chance of fielding $150 dollars and 90% chance of $10. Should we invest if we know it is successful? Should we invest if we are unaware. How is it better for the company to finance its investment, with equity or debt and why?

Reference no: EM132964120

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