Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investor offers you $839,123 in exchange for shares of your start-up company. The investor demands an annual rate of return of 65%, and expect

An investor offers you $839,123 in exchange for shares of your start-up company. The investor demands an annual rate of return of 65%, and expect that your IPO will be in 5 years. At that time you expect your firm to have annual income of around $1,806,424 dollars. A similar firm was recently acquired for $18,040,804 dollars. At the time of acquisition, their income was $1,939,713 million dollars per year. What percentage of your equity should you give to the investor? Enter your answer as a percentage, without decimals. For example, if your answer is 0.76543, that's 76.543%, which rounds to 77%.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Biblical Finance Reflections On Money Wealth And Possessions

Authors: Mark Lloydbottom, Keith Tondeur

1st Edition

0956395023, 978-0956395023

More Books

Students also viewed these Finance questions