The incorporators of Beta Corporation would like to make a counter offer to an angel investor....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The incorporators of Beta Corporation would like to make a counter offer to an angel investor. The latter is offering P4,000,000 for a 50% share in the business. They would like to make a direct comparison with Epsilon Corporation for valuation purposes. Beta will be simulating Epsilon Corporation's business model but will be operating in another geographical area, hence they are comparable. The following were gathered: Beta Epsilon 8,700,000 尹 3,800,000 3,500,000 Based on relative valuation, the angel investor is under/(over) valuing his potential share in the Beta equity by what amount? Current market value of ordinary shares Forecasted Annual Revenues P The incorporators of Beta Corporation would like to make a counter offer to an angel investor. The latter is offering P4,000,000 for a 50% share in the business. They would like to make a direct comparison with Epsilon Corporation for valuation purposes. Beta will be simulating Epsilon Corporation's business model but will be operating in another geographical area, hence they are comparable. The following were gathered: Beta Epsilon 8,700,000 尹 3,800,000 3,500,000 Based on relative valuation, the angel investor is under/(over) valuing his potential share in the Beta equity by what amount? Current market value of ordinary shares Forecasted Annual Revenues P
Expert Answer:
Answer rating: 100% (QA)
To determine the amount by which the angel investor is underover valuing his potential share in Beta ... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
Students also viewed these accounting questions
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
1. Hannah is applying for a life policy on her girlfriend Sarahs life. The policy is $500,000 and carries a large premium. Hannah is the main earner, so she is concerned about not being able to pay...
-
Hi there , I need help. for my work i need a relevant and well written introduction as well as conclusion to the following below. My work is complete i just need a introduction and conclusion please...
-
Find the first derivatives. f(P) = P 3 + 3P 2 - 7P + 2
-
In Problem 8.60, determine the angle that the face of the bolt should form with the line BC if the force P required to close the door is to be the same for both the position shown and the position...
-
The Big Event (TBE) recently started a business organizing food and music at weddings and other large events. In order to better understand the profitability of the business, the owner has asked you...
-
Computing unit cost During the month, a company with no departmentalization incurred costs of $45,000 for materials, $36,000 for labor, and $22,500 for factory overhead. There were no units in...
-
Werth Corporation earned $260,000 during a period when it had an average of 100,000 shares of common stock outstanding. The common stock sold at an average market price of $15 per share during the...
-
Let u = <7, -3>, v = . Find 4u - 3v.
-
Problem assignmemnt The newly appointed accountant of a start-up company Pioneer Limited, which has received funding from two sharks jointly in the Shark Tank against the issue of debentures, has...
-
Chinook Corporation sells a single product for $60 per unit. During the current year, Chinook reports sales revenues of $765,000, fixed costs of $252,000, and operating income of $207,000. What is...
-
If share rights are recognized on issuance, what happens to the share rights account if the share rights are exercised? Allowed to lapse? Compare this to the treatment of the common share conversion...
-
Assume that a Canadian company sells a product to a U.S. customer, and that the sale is denominated in U.S. dollars. What kind of a derivative instrument will eliminate the exchange risk? How will...
-
Define a derivative, and a hedge.
-
Explain the terms of a SARs program for employees.
-
Share-based payments to employees are trued up by the end of the vesting period. If the plan is cash-settled, for what factors is it trued up? If it is equity-settled?
-
The inventory at June 1 and the costs charged to Work in Process - Department "23" during the month of June are as follows: Inventory in process, June 1 3,800 units, 80% completed ($35,000 Materials;...
-
Using the theoretical sampling strategy, how many samples of size 4 (n = 4) can be drawn from a population of size: (a) N = 5? (b) N = 8? (c) N = 16? (d) N = 50?
-
Panessi leased to Barnes for a term of ten years beginning May 1 certain premises located at 527529 Main Street in Cleveland. The premises were improved with a three-story building, the first floor...
-
Gore had been the owner of 1 percent of the outstanding shares of the Webster Company, a corporation, since its organization ten years ago. Ratliff, the president of the company, was the owner of 70...
-
The United Steelworkers of America and Kaiser Aluminum entered into a master collective bargaining agreement covering terms and conditions of employment at fifteen Kaiser plants. The agreement...
-
Purchase and Disposal of Operating Asset and Effects on Statement of Cash Flows On January 1, 2008, Castlewood Company purchased some machinery for its production line for $104,000. Using an...
-
Depreciation as a Tax Shield The term tax shield refers to the amount of income tax saved by deducting depreciation for income tax purposes. Assume that Rummy Company is considering the purchase of...
-
Lump-Sum Purchase of Assets and Subsequent Events Dixon Manufacturing purchased, for cash, three large pieces of equipment. Based on recent sales of similar equipment, the fair market values are as...
Study smarter with the SolutionInn App