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Roger Harkel, CEO of Bestafer, Inc. seeks to raise $6.6 million in a private placement of equity in his early stage venture. Harkel conservatively projects
Roger Harkel, CEO of Bestafer, Inc. seeks to raise $6.6 million in a private placement of equity in his early stage venture. Harkel conservatively projects net income of $5 million in year five and knows that comparable companies trade at a price earnings ratio of 20X. What share of the company will a venture capitalist require today if her required rate of return is 50%? ((Hint: Round off the decimal to the nearest integer)
A. 89%
B.50%
C.76%
D. 30%
E.15%
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