Question
Your firm is looking at an investment of $2 million in an early stage opportunity today. You expect to exit in 5 years at
Your firm is looking at an investment of $2 million in an early stage opportunity today. You expect to exit in 5 years at an EBIT multiple of 15x and a Yr 5 EBIT of $8 million. No debt required. No additional equity to be raise. Your required rate of return (annual) is 25%. Cash flow profile: Year EBIT Multiple What percentage of the company should you ask for with the $2 million investment? 0 1 2 3 4 580 8 15 x
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Fundamentals of corporate finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
9th edition
978-0077459451, 77459458, 978-1259027628, 1259027627, 978-0073382395
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