Jennifer is considering to invest $500,000 in John's venture and targeting a 50% annual return for the coming 5 years. The venture has 1 million shares held by its founder and is expected to produce $500,000 in annual income in Year 5. It is known that a similar venture recently produced $1 million in annual income and sold shares to the public for $10 million. Required: 1) What is the value of the venture in Year 5 using direct capitalization? 2) What is the percent ownership of the venture that the founder, John, must give up in order to provide Jennifer her target return for her $500,000 investment? 3) How many new shares must be issued to Jennifer in order for her to earn her target return on her investment? 4) What is the price per share issued to Jennifer? 5) What is the pre-money valuation? 6) What is the post-money valuation