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1. Natasha is an example of what kind of an investor? 2. At each funding stage prior to the IPO (i.e., 1985, 2000, 2003,
1. Natasha is an example of what kind of an investor? 2. At each funding stage prior to the IPO (i.e., 1985, 2000, 2003, and 2006), calculate the pre-money and post-money valuation of the equity of the company. 3. What fraction of the IPO was a primary offering and what fraction was a secondary offering? 4. Immediately following the IPO the shares traded at $14.50. ople Con Show a. At this price, what was the value of the whole company? Expressed in percent, by how much was the deal underpriced? b. In dollars, how much did this underpricing cost existing shareholders? c. Assuming that none of the owners purchased additional shares at the IPO, what fraction of the equity did Hannah own and what was it worth immediately following the IPO? d. What was the company's debt-equity ratio-the ratio of the book value of debt outstanding to the market value of equity-immediately following the IPO? 5. Address the following questions related to the SEO: a. What fraction of the SEO was a primary offering and what fraction was a second- ary offering? come b. Assuming that the underwriters charged a 5% fee, what were the proceeds that resulted from Hannah's sale of her stock? How much money did the company raise that would be available to fund future investments and repay the term loan? share. 6. Immediately following the SEO, the stock price remained at $20 per a. Once the term loan was repaid, what was the value of the whole company? b. What fraction of the equity did Hannah own? 7. Assume the LBO was successful. a. How much bank debt was required? b. What was the debt-equity ratio immediately following the LBO? 8. A year after the LBO, just after the second payment was made, the convertible debt traded for a price of $950. a. What was its yield to maturity? b. What was the yield to call? 9. Assume that in the five years following the LBO Hannah was able to turn the company around. Over the course of this period, all the bank debt was repaid and the company went public again. The price per share was now $60/share. Predict what the holders of the convertible debt would do. What would their investment be worth?
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