Problem 23-12
	Three years ago, you founded Outdoor Recreation, Inc., a retailer specializing in the sale of equipment and clothing for recreational activities such as camping, skiing, and hiking. So far, your company has gone through three funding rounds:
		Round	Date	Investor	Shares	Share Price ($)
		Series A	Feb. 2009	You	500,000	1.00
		Series B	Aug. 2010	Angels	1,000,000	2.00
		Series C	Sept. 2011	Venture Capital	2,000,000	3.50
	Currently, it is 2012 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 6.5 million new shares through this IPO. Assuming that your firm successfully completes its IPO, you forecast that 2012 net income will be $7.5 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 2012 forecasted earnings, average 20.0. Assuming that your IPO is set at a price that implies a similar multiple, what will your IPO price per share be?
	b.	What percentage of the firm will you own after the IPO?
		New shares		6,500,000
		2012 net income forecast		$7,500,000
		Forward P/E		20.00
	a.	Your investment banker advises you that the prices of other recent IPOs have been set such that the P/E ratios, based on 2012 forecasted earnings, average 20.0. Assuming that your IPO is set at a price that implies a similar multiple, what will your IPO price per share be?
		New shares outstanding
		Earnings per share
		New price with comparable P/E
	b.	What percentage of the firm will you own after the IPO?
		Percentage you own post IPO
Requirements
	1.	In cell E21, by using cell references, calculate the number of new shares outstanding (1 pt.).
	2.	In cell E22, by using cell references, calculate the forecasted earnings per share (1 pt.).
	3.	In cell E23, by using cell references, calculate the share price for the IPO (1 pt.).
	4.	In cell E27, by using cell references, calculate the percentage of the firm that you own after the IPO (1 pt.).