A venture capital firm wants to invest in your venture called COMM387.com that you started 2 years ago. For COMM387.com, the venture capital firm is using a target annual compound rate of return of 25%. You expect to sell COMM387.com for $10 million in 5 years and you own 500,000 shares of the company now.

1. How much money should you ask from a venture capital firm in exchange for 30% ownership stake in your company? 2. What is the share price of COMM387.com at which the venture capital firm will be buying shares in this case? 3. How does the share price of COMM387.com you computed in 2. change if you own 100,000 shares now instead of 500,000 shares?