Would it be worse if the firm raised equity

Reference no: EM131241559

1. Repeat the last question but now assume that this seller has personal savings of $200. With this extra capital and bargaining power, what can the seller expect to raise and at what price?

2. If investors are rational and managers are overoptimistic, how would the value of the firm change if management were to raise more money for new projects? Would it be worse if the firm raised equity?

Reference no: EM131241559

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