Problem 15-1 Venture Capital (LO1) You have purchased 1 million shares in a restaurant chain venture. At this zero-stage Investment your company's assets are $190,000 plus the idea for your new product Suppose the first milestone for your restaurant chain is demonstrated profitability at the first two outlets. You budget an additional $1139,000 investment to get to this milestone. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.85 each a. How many shares will you need to sell to raise the additional $1,139,000? (Enter your answer in whole numbers, not in millions.) Shares b. What fraction of the firm will you own after the VC investment? (Enter your answer as a percent rounded to 1 decimal place.) Percentage of shares owned TB TF Qu. 15-02 Venture capitalists generally provide sufficient up-front... Venture capitalists generally provide sufficient up-front funding in one lump sum to take a new firm to the point where it can go public True or False True False TB TF Qu. 15-04 Underwriters usually play a triple role-first... Underwriters usually play a triple role-first providing the company with procedural and financial advice, then buying the stock, and finally reselling it to the public. True or False True False TB TF Qu. 15-08 Shelf registration is a procedure that... Shelf registration is a procedure that allows firms to file several registration statements for one issue of the security. True or False True False TB TF Qu. 15-09 The book building method used by almost... The book building method used by almost all IPOs in the United States is like an auction, since potential buyers indicate how many shares they are prepared to buy at given prices. True or False True False TB TF Qu. 15-10 The SEC requires the sale of... The SEC requires the sale of a private placement to be limited to a small number of knowledgeable investors. True or False True False TB TF Qu. 15-12 When securities are issued under a... When securities are issued under a firm commitment, the underwriter bears the risk of low demand from investors. True or False True False