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Sam Bail, CEO of GreatVenture, seeks to raise $5 million from a venture capital firm. Sam conservatively projects sales of $6 million in year five
Sam Bail, CEO of GreatVenture, seeks to raise $5 million from a venture capital firm. Sam conservatively projects sales of $6 million in year five and knows that comparable companies trade at a price-to-sales ratio of 25X (in year five). What share of the company will a venture capitalist require today if her required rate of return is50% per year and she expects no more following investors?
25.3%
5%
16.9%
36.5%
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