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You have just discovered a groundbreaking drug. You have approached a venture capitalist, asking for a $60 million investment in your company. You believe that
You have just discovered a groundbreaking drug. You have approached a venture capitalist, asking for a $60 million investment in your company. You believe that the initial $60 million investment to generate $25 million annual free cash flows indefinitely. The discount rate is 15%. If the venture capitalist agrees to give you the $60 million in exchange for a 40% ownership share in the company, what is the NPV of the venture capitalist?
a.6.7 million
b.-10 million
c.150.0 million
d.0 million
e.66.7 million
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