Medina's Diners plans to start a chain of virtual diners. They believe that if they...
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Medina's Diners plans to start a chain of virtual diners. They believe that if they raise $3 million now, they can sell the chain to Yum Brands for $75 million in five years. They are negotiating with an investor group that is willing to fund the project but believes that it will be 8 years before the company will be able to be sold for $75 million. Show the difference in how much of the company the founders will have to give up to raise the $3 million under the two exit timing assumptions. Use 30% as the required rate of return for investors.
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