Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

NeoTech is a company founded by Gina. Gina owns 1 4 million common shares of NeoTech. Recently, the company raised $ 4 million from New

NeoTech is a company founded by Gina. Gina owns 14 million common shares of NeoTech. Recently, the company raised $4 million from New Ventures VC in exchange for 6 million preferred shares. The preferred shares are convertible on a one-for-one basis initially with a 6% annual accrued interest rate with a 1.5X participating liquidating preference.
The company is not expected to raise any further financing but is expected to be acquired in 5 years for $27 million.
How much will Gina receive in selling her shares with the sale of the company in 5 years?
Express your answer in $ millions to two decimal places e.g. $5.62 million should be expressed as 5.62.
Answer: 13.35

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Finance

Authors: Scott Besley, Eugene F. Brigham

6th edition

9781305178045, 1285429648, 1305178041, 978-1285429649

More Books

Students also viewed these Finance questions

Question

What applied experiences do you have? (For Applied Programs Only)

Answered: 1 week ago

Question

What are the six personality types in John Hollands career theory?

Answered: 1 week ago