Question
In 2017, MKT ventures invests $100,000 in SPC with the post-money valuation of $2 per share. In 2017, SPC is preparing IPO in 3 years.
In 2017, MKT ventures invests $100,000 in SPC with the post-money valuation of $2 per share. In 2017, SPC is preparing IPO in 3 years. Expected earnings in 2019 is $20 million. PER of benchmark companies at the time of IPO is expected to be 35.
Additional expectation for the IPO is as follows:
The number of existing shares = 1 million shares
Employee stock options: 200,000 shares
New issue = 20% of existing shares
IPO discount = 30%
Given that MKT ventures will sell entire shares at the IPO price, what is the expected IRR and TVPI?
Step 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
Financial Accounting A Critical Approach
Authors: John Friedlan
3rd Edition
0070967601, 978-0070967601
