Use the following information for questions 10-15.

A firm has the following expected free cash flows (note: all cash flows and values are expected, or Probability-weighted cash flows). All figures are in $MM. Free Cash Flow is projected to grow at a 5% steady state rate starting in year 5. Similar firms have a beta of 3.0, the risk free rate is 4% and the market risk premium is 5%. Net income in year 5 is projected to be $48 million, and the P/E multiple for comparable firms is 12x. You are considering investing $40 MM in the firm, and estimate a failure rate of 40% in year 5.

Year	1	2	3	4	5
FCF	2.0	8.0	16.0	40	60

10. What is the postmoney valuation assuming you use the constant growth (i.e. growing perpetuity) method for the terminal value estimate and also use the probability failure adjustment?

11. What % ownership should you ask for based on your answer in #10?

12. What is the premoney valuation based on your answer in #10?

13. What is the postmoney valuation assuming you use the multiples method for the terminal value estimate?

14. What % ownership should you ask for based on your answer in #13?

15. What is the premoney valuation based on your answer in #13?