Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company investor wants to invest $2.5 million in the Company Export Import that you have which has been in operation for the past seven

A company investor wants to invest $2.5 million in the Company Export Import that you have which has been in operation for the past seven months. You do not expect to make a profit until the 5th year, and when your net income is expected to $5,000,000. For Common Stock, Export-Import where comparable companies are currently it is traded on the free market at $50 per share. Net profit exportimport last year was $500,000 and the company has 200,000 shares of common stock circulated.

9% acquired percentage for 2,5 million investment d. Based on the equation , give your analysis whether the company should continue

image text in transcribed

cooperation with these investors or you will choose another investment source for example by borrowing from the bank. Give youropinion .

I Acquired % Ownership = ExE5)/(1+r) 2,500,000 10,000,000 =x5,000,000)/(1+0,305 500,000 9%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

3rd edition

77826485, 978-0077722074, 77722078, 978-0077826482

Students also viewed these Accounting questions