Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

XYZ Inc. is seeking an investment of $67,000 from your venture capital firm. After extensive economic analysis, you estimate that the exit value of the

image text in transcribed
image text in transcribed
XYZ Inc. is seeking an investment of $67,000 from your venture capital firm. After extensive economic analysis, you estimate that the exit value of the company will be $406,000 5 years from now. Because of the risk, you will only invest if you can generate of return of 14% per year on your investment. The founders want to have 36,000 shares of the company. How many shares a the company will your venture capital fund ask for? Round all your calculations to at least 4 decimals. Round your answer to the nearest whole number of shares, for example 100123 FSL Inc. is seeking an investment of $70,000 from your venture capital firm. After extensive economic analysis, you estimate that the exit value of the company will be $477,000 6 years from now. Because of the risk, you will only invest if you can generate of return of 18% per year on your investment. What percent of the company will you ask for in exchange for your investment today? Enter your answer as a decimal and round to 4 decimal places, for example 0.1234

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management

Authors: Rajiv Srivastava, Anil Misra

2nd Edition

0198072074, 9780198072072

More Books

Students also viewed these Finance questions

Question

What is the general process for selecting expatriates?

Answered: 1 week ago