10. You and your partner own all 1,000 shares in your company. A new, 3 para invest in the company. She will own 200 newly issued shares (so after her purchase there will be 1,200 shares outstanding). He will pay $300,000 for all 200 shares. What is the whole company worth (all 100% of the equity)? A. $1,800,000 B. $1,500,000 C. $300,000 D. $1,000,000 Valuation 17. Your company will complete an public offering of new shares. There will be 100,000 shares outstanding after the offering. Net income is $1,000,000. Based on the information in the table below what should be the per share public offering price? Average 9.7x Competitor 1 7. 8x Competitor 2 1 0. 1x Competitor 3 1 1.3x P/E ratio A. $9.7 B. $10.0 C. $97.0 D. $1,000,000 18. EBITDA/professional for an architecture office has increased 10% over the past 3 years while EBITDA/square foot of office space and EBITDA/support staff have both decreased 5% during the same period. What might this indicate about the company/industry? A. More professionals doing work that requires a smaller work space with fewer assistants. B. Fewer professionals doing work that requires a larger work space with more assistants. C. Fewer professionals doing work that requires a smaller work space with fewer assistants. D. More professionals doing work that requires a larger work space with fewer assistants. 19. If the price of a share of stock is $150 and the EPS (earnings per share) is $20, what growth rate in earnings is the market expecting if the standard holding period is 5 years? Hint: 1) determine the average earnings to get repaid in 5 years = $150/5,2) then apply the following formula: ($20 + X)/2 = $150/5 - solve for X, 3) then calculate (X/$20)^(1/5)-1. A. 7.0% B. 1.9% C. 32.4% D. 14.9%