What factors would affect your decision

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You own a small relatively new company that is doing well, but you have maxed out on the bank loans. Your firm's growth is severely limited; you believe that additional funding would allow your firm to exploit much greater opportunities.

Currently, your firm has a value of $10 million. A hedge fund offers two investment options. First, $5 million cash in exchange for a 40% ownership share.

Second, $10 million cash today in exchange for a 55% ownership of the firm. Would you accept either offer? What factors would affect your decision?

Reference no: EM131985417

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