Question
A VC has a target rate of 70% per annum, makes an investment of $2.0 million today, and foresees an exit of $60 million in
A VC has a target rate of 70% per annum, makes an investment of $2.0 million today, and foresees an exit of $60 million in five years. The exit value includes the $2.0 million investment. There are currently 250,000 shares.
a The probability of success (exit at $60 million) is 15% and the probability of failure (exit at $0) is 85%. What is the expected IRR?
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Principles of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
Arab World Edition
1408271583, 978-1408271582
