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.
Each part below is worth 6 marks.Answer the following:
a)What ownership percentage does the VC require to make the investment?
b)How many new shares are issued to the VC?
c)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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Using Microsoft Excel And Access 2013 For Accounting
Authors: Glenn Owen
4th Edition
1305161858, 9781305161856
