Question
You are given the following information: Baseline (last year or year 1) sales: $12.00 million Sales growth rate for years 1-7: 45% Sales growth rate
You are given the following information: Baseline (last year or year 1) sales: $12.00 million Sales growth rate for years 1-7: 45% Sales growth rate for years 8-10: 25% Sales growth rate for years 11-on: 8% Profit margin for years 1-10: 35% Profit margin for years 11-on: 18% Discount rate or cost of capital: 30% during years 1-10; and 12% for years 11-on. Answer the following questions: 1. What is the value of this company using the Fundamental Method of valuation? (50 points) 2. For $3.0 million investment, what portion of the company should be given up? (10 points) 3. Assume you are a financial consultant to the entrepreneur, and this entrepreneur has asked you to advise her regarding the $3.0 million financing. How will you go about advising your client? Outline your thought process in this regard. (15 points) Use Excel for this question. (Total Points given: 75 points
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