Question
1) You founded your firm with a contribution of $500000, receiving 1500000 shares of stock. Since then, you sold 1000000 stocks to Angel Investors. Now
1) You founded your firm with a contribution of $500000, receiving 1500000 shares of stock. Since then, you sold 1000000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $4000000 and would receive 3000000 newly issued shares. What is the post-money valuation? Express the terms of your answer completely and in strictly numerical terms. For example: If your answer is one million dollars, write: 1000000.
2) You founded your firm with a contribution of $500000, receiving 1500000 shares of stock. Since then, you sold 1000000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $4000000 and would receive 3000000 newly issued shares. If this is the VC's first investment in the company, what percentage of the firm will they end up owning?
3) You founded your firm with a contribution of $500000, receiving 1500000 shares of stock. Since then, you sold 1000000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $4000000 and would receive 3000000 newly issued shares. If this is the VC's first investment in the company, what percentage will you own?
4) You founded your firm with a contribution of $500000, receiving 1500000 shares of stock. Since then, you sold 1000000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $4000000 and would receive 3000000 newly issued shares. If this is the VC's first investment in the company, what is the value of your shares?
5) Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Detox had revenues of $30 Millions of USDs and earnings of $9 of Millions of USDs. Detox company has filed a registration statement with the SEC for its IPO. If the industry average Price/Earnings ratio and Price/Revenues ratio for the recent fiscal year were 13 and 0.8 respectively.
6) Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Detox had revenues of $30 Millions of USDs and earnings of $9 of Millions of USDs. Detox company has filed a registration statement with the SEC for its IPO. If the industry average Price/Earnings ratio and Price/Revenues ratio for the recent fiscal year were 13 and 0.8 respectively.
7) Consider the situation faced by the CFO of a company with a market capitalization of $300 Millions of USD, e.g. the firm has 20 million shares outstanding, so the shares are trading at $15 per share. The CFO needs to raise $80 Millions of USDs and announces a rights issue. Each existing shareholder is sent 8 right for every share he or she owns. The CFO has not decided how many rights will be required to purchase a share of new stock. At the current price per share, what is the maximum amount of rights the CFO can require stockholders for purchasing a share of new stock and so be able to raise the $80 Millions of USDs?
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