Question
Hello, I want soln of this question but please you have to follow the method given in image. It is hint or model you can
Hello, I want soln of this question but please you have to follow the method given in image. It is hint or model you can say made on excel by instructor. Follow this, do not use any other method or solution. Use excel please and show cell formulas.
A potential investor is seeking to invest $750,000 in a venture, which currently has 1,000,000 shares held by its founders, and is targeting a 45% per annum return for the next five years. The venture is expected to produce $1,000,000 in income per year at year 5. It is known that a similar venture recently produced $2,000,000 in income and sold shares to the public for $15,000,000.
a. What is the percent ownership of our venture that must be sold in order to provide the venture investors target return? b. What is the number of shares that must be issued to the new investor in order for the investor to earn his target return? c. What is the issue price per share? d. What is the pre-money valuation? e. What is the post-money valuation? Make sure you specifically include a section in your submission that clearly states your answer to each question.
50% Annual Return to Investor Years to exit Investment Business Value at Exit 650,000 10,000,000 650,000 975,000 1,462,500 2,193,750 3,290,625 4,935,938 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Existing Shareholder New Investor $$ Shares 2,000,000 650,000 1,949,398 3,949,398 % Price 50.64% 49.36% 0.3334 100.00% Pre-money Valuation 666,872.43 Post-money Valuation 1,316,872.43Step 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