Series A Venture Capital Financing:

Live Deliciously is a start-up firm in need of financing after surviving to this point only on the savings of the founder. That founder, Phillip Black, finds a Series A venture capital investor group willing to pay $25.0 million in order to acquire a 40.0% stake in the firm. This would be the first use of any outside capital by the firm.

Series B Venture Capital Financing:

Three years after the first round of financing, Live Deliciously received a second Series B round of venture capital financing. The investors provided $53.0 million$53.0 million for a 40.040.0% stake of the firm.

a) What was the implied firm value after the Series B round of financing?3 decimal places

b) Due to the Series B round of financing, Phillip Black's percentage ownership stake of Live Deliciously has decreased by % of total ownership to %, whereas the value of Phillip Black's ownership stake has changed by $ million to $ million.3 decimal places

c) Due to the Series B round of financing, the Series A investors' ownership stake of Live Deliciously has decreased by % of total ownernship to %, whereas the value of the Series A investors' ownership stake has changed by $ million to $ million.3 decimal places

Initial Public Offering (IPO):

The owners of the firm (Phillip Black, the Series A investors, & the Series B investors) collectively decided 5 years later to undergo an IPO. The IPO involved the flotation of 14.600 million new shares for a total of $186.150 million from investors. The shares issued through the IPO correspond to 40.0% of Live Deliciouslys ownership. The issue price was set at $12.75/share. However, on the first day of trading after the IPO, the firms stock closed at $18.50/share$. The underwriting fees were $18.250 million.

d) What was the IPO underwriters' spread per share?3 decimal places

e) What was the capital amount raised (net of underwriting) costs from the IPO? That is, how much new cash does Live Deliciously now have available as a result of the IPO to spend on their operations?3 decimal places

f) How much was the underpricing per share? And what was the total underpricing cost?3 decimal places

g) What was the total cost of the issuance, including all direct and indirect costs?3 decimal places

h) What was the value of the entire company implied by the price that shares were sold to the IPO investors at? What does the closing price at the end of the first day of trading reveal that the share market believes that the entire firm is actually worth?3 decimal places

i) How much did the pre-IPO investors (Phillip Black, the Series A investors, & the Series B investors) as a group collectively realize in wealth loss due to the IPO underpricing?3 decimal places

j) How much did Phillip Black (the founder) individually realize in wealth loss due to the IPO underpricing?3 decimal places

k) If there had been no underpricing, instead of selling 40.0% of their firm through the IPO, the pre-IPO investors could have raised exactly as much money while only selling what percent of the total ownership?3 decimal places

l) Assume now that there had been zero underpricing or overpricing. In addition, assume that the pre-IPO investors each retain exactly the same number of shares after the IPO as they had prior to the IPO. How many new shares would have been issued through the IPO now? What would have been the market price of the shares of Live Deliciously after the IPO.3 decimal places