Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

XYZ Inc. is seeking an investment of $69,000 from your venture capital firm. After extensive economic analysis, you estimate that the exit value of

image text in transcribed 


XYZ Inc. is seeking an investment of $69,000 from your venture capital firm. After extensive economic analysis, you estimate that the exit value of the company will be $347,000 4 years from now. Because of the risk, you will only invest if you can generate of return of 12% per year on your investment. The founders want to have 100,000 shares of the company. What is the post-money valuation of the company? Round your answer to the nearest whole number, for example 50501.

Step by Step Solution

3.42 Rating (146 Votes )

There are 3 Steps involved in it

Step: 1

1 Calculate the present value PV of the investment using the formula PV FV 1 rn W... 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

Step: 3

blur-text-image

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

Corporate Finance A Focused Approach

Authors: Michael C. Ehrhardt, Eugene F. Brigham

6th edition

1305637100, 978-1305637108

More Books

Students also viewed these Finance questions