Question

In: Finance

Your​ start-up company needs capital. Right​ now, you own 100% of the firm with 10.4 million...

Your​ start-up company needs capital. Right​ now, you own 100% of the firm with 10.4 million shares. You have received two offers from venture capitalists. The first offers to invest $2.97 million for 1.05 million new shares. The second offers  $1.97 million for 461,000 new shares.

a. What is the first​ offer's post-money valuation of the​ firm?

b. What is the second​ offer's post-money valuation of the​ firm?

c. What is the difference in the percentage dilution caused by each​ offer?

d. What is the dilution per dollar invested for each​ offer?

​(Round to the nearest​ dollar.)

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

ROUNDING CONDTIONS ARE NOT MENTIONED FOR OTHER QUESTIONS

BUT I DID SUM EARLIER, IN WHICH FOR LAST QUESTION, THEY TOLD TO ROUND TILL 9 DECIMALS, BUT AS YOU HAVE MENTIONED TO NEAREST DOLLAR, ANSWER = 0 FOR BOTH OFFERS

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Your start-up company needs capital. Right now, you own 100% of the firm with 9.9 million...
Your start-up company needs capital. Right now, you own 100% of the firm with 9.9 million shares. You have received two offers from venture capitalists. The first offers to invest $ 2.94 million for 1.13 million new shares. The second offers $2.02 million for 503,000 new shares. a. What is the first offer's post-money valuation of the firm? The post-money valuation will be $_________. (Round to the nearest dollar.) b. What is the second offer's post-money valuation of the firm?...
Your​ start-up company needs capital. Right​ now, you own 100% of the firm with 10.0 million...
Your​ start-up company needs capital. Right​ now, you own 100% of the firm with 10.0 million shares. You have received two offers from venture capitalists. The first offers to invest $3.00 million for 1.00 million new shares. The second offers $2.00 million for 500,000 new shares. a. What is the first​ offer's post-money valuation of the​ firm? b. What is the second​ offer's post-money valuation of the​ firm? c. What is the difference in the percentage dilution caused by each​...
Your​ start-up company needs capital. Right​ now, you own 100% of the firm with 9.6 million...
Your​ start-up company needs capital. Right​ now, you own 100% of the firm with 9.6 million shares. You have received two offers from venture capitalists. The first offers to invest $ 3.09 million for 1.05 million new shares. The second offer $ 2.07 million for 464,000 new shares. a. What is the first​ offer's post-money valuation of the​ firm? b. What is the second​ offer's post-money valuation of the​ firm? c. What is the difference in the percentage dilution caused...
You have a new start-up firm. You think that the value of your start-up is around...
You have a new start-up firm. You think that the value of your start-up is around $60 million, but you will need to do a serious NPV analysis before you know the precise value. You are planning to have a 50% debt-to-value ratio, and that you will continuously rebalance to maintain this leverage. You have information on two other companies. The names of these companies are “Comp A” and “Comp B”. Comp A has the same business risk as your...
Your firm is considering a project with no start-up costs that will generate $1 million in...
Your firm is considering a project with no start-up costs that will generate $1 million in FCF forever, starting in one year. Your debt-to-equity ratio is 1, your equity-holders require a return of 12%, and your debt-holders require a return of 8%. The tax rate is 20%. Using the Adjusted Present Value method, compute the unlevered value of the project, the value of the tax shield (assuming you maintain your current leverage ratio), and the levered value of the project....
You are considering making a movie. The movie is expected to cost $ 10.4 million up...
You are considering making a movie. The movie is expected to cost $ 10.4 million up front and take a year to produce. After​ that, it is expected to make $ 4.6 million in the year it is released and $ 1.6 million for the following four years. What is the payback period of this​ investment? If you require a payback period of two​ years, will you make the​ movie? Does the movie have positive NPV if the cost of...
You work for a venture capital firm and are approached to finance a new high-tech start-up....
You work for a venture capital firm and are approached to finance a new high-tech start-up. While you believe in the business idea, you also believe it is very risky. What strategies can help to mitigate the risk to your firm? Explain how these measures would work.
You now own a manufacturing firm and your firm makes 6 products. Each product has the...
You now own a manufacturing firm and your firm makes 6 products. Each product has the following cost components: Material, Labor, and Marketing. In addition, there is a fixed cost for the firm. Cost of item in production units Production units BA AB XC RC WA RT Material Units 2 2 1 1 3 1 Labor units 1 1 1 2 2 1 Marketing 1 1 1 2 2 1 Production units cost per unit Material $7 5 4 5...
Imagine you are about to launch your own start-up (state what is the product or service...
Imagine you are about to launch your own start-up (state what is the product or service you will offer), what would be your long term goal? Sell, Maintain, or Grow that business? Why, as a founder, would you choose that option?
You are a manager in a start-up firm based in Bengaluru. The firm is planning to...
You are a manager in a start-up firm based in Bengaluru. The firm is planning to go public and you have been tasked at arriving at an approximate valuation for the firm. The firm is in the business of providing medical grade pure water. The asset beta of the firms’ in the industry with similar size is 1.3 and 1.4. The risk free rate is 5% and the market risk premium is 7%. At present, the firm doesn’t have any...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT