INFORMATION

You are employed as an equity analyst at XXX Venture Capital Fund, which has just invested R$100$ million in Hermanus Enterprises. Your task is to determine the price per share for the investment in Hermanus Enterprises and the pre$-$money valuation as well as decide on the share of the firm that should be demanded by XXX Venture Capital Fund. It is anticipated that Hermanus Enterprises will generate a net income of R$400$ million in $6$ years' time when XXX Venture Capital Fund plans to exit. Comparable profitable ventures listed on the JSE are currently trading at an average Price$-$Earnings Ratio of $15.$

Currently, Hermanus Enterprises has $500,000$ shares outstanding. Your manager has specified that XXX Venture Capital Fund requires a target rate of return of $80\%$ on the investment.

REQUIRED:

Calculate the following showing all calculations:

$6\mathrm{.}2\mathrm{.}1.$The required ownership percentage $($round off answer to one decimal place$).$

$(4$ marks$)$