It is now 2019 and you need to raise additional capital to expand your business. You have decided to take your firm public through an IPO. You would like to issue an additional 6.0million new shares through this IPO. Assuming that your firm completes its IPO, you forecast that

2019 net income will be $ 6.5 million.

a. Your investment banker advises you that the prices of other recent IPOs have been set such that the P/E ratios based on

2019 forecasted earnings average

20.8. Assuming that your IPO is set at a price that implies a similar multiple, what will be your IPO price per share?

b. What percent of the firm will you own after the IPO?

a. Your investment banker advises you that the prices of other recent IPOs have been set such that the P/E ratios based on

2019 forecasted earnings average 20.8. Assuming that your IPO is set at a price that implies a similar multiple, what will be your IPO price per share?

The IPO price will be $_____?per share. (Round to the nearest cent.)

b. What percent of the firm will you own after the IPO?

After the IPO, you will own ______%? of the firm. (Round to one decimal place.)

Round Series A Series B Series C Date Feb. 2016 Aug. 2017 Sept 2018 Investor You Angels Venture Capital Shares 400,000 1,100,000 2,300,000 Share Price ($) 0.50 100 3.25