Question
A VC investor (VC) enters a company at the P0/E0-multiple (P/E=price/Earnings per share, at time 0) of 10 when E0=EPS0 is 0,75/share. Earnings are projected
A VC investor (VC) enters a company at the P0/E0-multiple (P/E=price/Earnings per share, at time 0) of 10 when E0=EPS0 is 0,75/share. Earnings are projected to grow by 10% p.a. and 70% of EPS are re-invested annually. VC expects to be able to exit at P5/E5-multiple of 15. What would be the annual IRR for VC?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Strategic Business Management From Planning To Performance
Authors: Gary Cokins
1st Edition
1937352358, 978-1937352356
