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Please give an answer also with the formulas. A venture capitalist firm wants to invest the following amount in your BradTrading.com venture that you started
Please give an answer also with the formulas.
A venture capitalist firm wants to invest the following amount in your BradTrading.com venture that you started six months ago. You do not expect to make a profit until year four when your net income is expected to be as follows. The common stock of BioSystems, a "comparable" firm, currently trades in the over-the-counter market at $30 per share. BioSystems' net income for the most recent year was $300,000 and the firm has 150,000 shares of common stock outstanding.. A. Apply the VC method to determine the value of the BradTrading at the end of four years. B. If VCs want a 40% compound annual rate of return on similar investments, what is the present value of your BradTrading venture? C. What percentage of ownership of the BradTrading.com venture will you have to give up to the VC firm for its determined investmentStep by Step Solution
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