Should you accept the venture capital

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Your firm has a limited capital with an estimated value of $25 million. A venture capitalist is willing to contribute $15 million to your firm in exchange of 40% of the value of the firm. With this additional capital, the firm will be worth $50 million.

a. Should you accept the venture capital? Justify your answer with calculations illustrating if you will be better off or not.

b. At what percentage of firm value would you break even on the venture capital financing?

Reference no: EM132053757

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