Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $100,000 plus the idea for your

image text in transcribed

You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $100,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.40 each. a. How many shares will you need to sell to raise the additional $500,000? (Enter your answer in whole numbers, not in millions.) Shares 1,250,000 b. What fraction of the firm will you own after the VC investment? (Enter your answer as a percent rounded to 1 decimal place.) Percentage of shares owned 0.7 %

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

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

Principles Of Macroeconomics

Authors: Frank, Bernanke, Antonovics, Heffetz

3rd Edition

1259117162, 9781259117169

More Books

Students also viewed these Finance questions