IPO example 1) Owner forms a company with SS50,000 of his own money 2) One year later an Angel Investor buys 40% of the company for Si 00,000. Owner incorporates taking 150,000 shares and giving Angel investor 100,000 shares 3) Three years later a Venture capitalist buys 250,000 shares for S500,000 4) The next year Venture capitalist buys 500,000 shares for $2,000,000 5) Three years later the company sells an IPO. The stock price is $10/share. A total of 1,000,000 shares are sold, of which 100,000 belonged to the Angel investor and 250,000 shares belonged to the Venture capitalist, so 650,000 were newly issued 6) Ten years later a total of 3,150,000 (after seasoned equity offerings SEO) shares are outstanding, but the stock price has fallen to $4. The original owner still owns 150,000 private. and wants to purchase the remaining 3,000,000 and take the company Owner offers S5 per share for all 3,000,000 outstanding shares To pay $15,000,000 10 year, $1,000 bonds are sold with a 6% coupo annually, callable in 5 years at par and with a 100 conversion ratio. Three years later the bonds are selling for $950 7) 8) n rate paid semi- 9) A) Calculate the pre-money and post-money value after each funding stage B) What fraction of IPO was primary offering and what percentage secondary offering? C) Calculate YTM and YTC if the bonds are purchased 3 years after being issued for $950. D) If the company share price reached $15, what would the convertible bondholders do? What would their bonds be worth