The CEO of FundBun, seeks to raise $5M in a private placement of equity in his early-stage venture. FundBun conservatively projects net income of $5 million in year five and knows that comparable companies trade at a price earnings ratio of 20X. a. What equity stake (%) of the company will a venture capitalist require today if her required rate of return is 50% per annum? b. If the company has 1,000,000 shares outstanding before the private placement, how many shares should the VC purchase? What price per share should he agree to pay if his required rate of return is 50%? c. FundBun feels he may need as much as $12 million in total outside financing to launch his new product. If he seeks to raise the full amount in this round, how much of his company will he have to give up? Assume that again the company has 1,000,000 shares outstanding before. What price per share will the VC agree to pay if his required rate of return is 50%? What if the VCs required rate of return is 80%? d. Draw graphs that show the relationship between the investor share required, the investor discount rate, and the amount of capital raised. e. MyFund likes FundBun's plan but believes that generous stock options are needed to recruit a senior management team. She believes management should own at least 15% of the company by the end of year 5. Given this, what share of the company should MyFund insist on today if her required rate of return is 50% (assume that again the company has 1,000,000 shares outstanding before and is raising $5M)