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1 . Using the information below, please answer the following questions about KAKA, a startup company. In your analysis, assume the valuation date is the
Using the information below, please answer the following questions about KAKA, a startup company. In your analysis, assume the valuation date is the end of year projected earnings will in year will be $ million, and an appropriate pricetoearnings ratio for valuing these earnings is times
Financing Round Amount in $ millions Year Required Return
$
$
In addition, the company wants to reserve percent of the shares outstanding at time for employee options.
a What percentage ownership at time should roundone investors demand for their $ million investment?
b If XOXO presently has one million shares outstanding, how many shares should roundone investors demand at time
c What is the implied price per share of XOXO stock at time
d What would be the postmoney valuation at the closing of the first round?
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