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Growmore ltd., a personal investment and loans provider, is planning to expand and requires an additional funding of Rs. 10,000,000. The venture expects to earn

Growmore ltd., a personal investment and loans provider, is planning to expand and requires an additional funding of Rs. 10,000,000. The venture expects to earn Rs. 45,000,000 in year 4. The company approaches Mr. A, a venture capitalist, who is willing to fund the expansion at a 30% rate of return (annually). MoneyUp is a competitor having a market cap of Rs. 60,000,000 and a capitalization rate of 12%. The existing outstanding number of shares is 40,000. Based on the given information, answer the following:

i. Calculate the value of Growmore Ltd. in year 4 as well as estimate its present value. (1 mark)

ii. How much percentage of ownership will be acquired by Mr. A? Also, determine the total number of outstanding shares after the additional round of financing? (2 marks)

iii. Calculate the pre-money and post-money valuation on both present value and future value basis. (2 marks)

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