A venture capital backed start up your friend is asking you to invest in has $2.5 million in assets and $1.2 million in liabilities. They are trying to raise more equity capital at a $6.5 million valuation.

-According to the Balance Sheet Identity, how much equity does the company have?

-What is the implied Price-to-Book Ratio?

-If you are value investor, would you consider this a fair valuation and why?

-If you are a growth investor, would you consider this a fair valuation and why?