You are thinking about investing $10 000 in a start-up and selling 1/2 of your stake...

You are thinking about investing $10 000 in a start-up and selling 1/2 of your stake at the next round of funding in 5 years and the other half - at the IPO, which is expected in 10 years. The company is expected to grow at 13% a year until its IPO date. What is the value of this investment opportunity to you today, if the risk-adjusted discount rate is 10%?

(Group of answer choices)

12263.80

12515.95

11440.07

10000.00

38554.33

Expert Solution

Correct answer: 12263.80

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 1 year ago

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