Homework_5

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Starware Software was founded last year to develop software for gaming applications. The founder initially invested $1,000,000 and received 12 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.00 million and wants to own 18% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 18% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)? a. How many shares must the venture capitalist receive to end up with 33% of the company? What is the implied price per share of this funding round? The venture capitalist will receive million shares. (Round to three decimal places.) The implied price per share is $ per share. (Round to the nearest cent.) b. What will the value of the…

Starware Software was founded last year to develop software for gaming applications. The founder initially invested $800,000 and received 8.000 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.0 million and wants to own 20% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)? a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round? The venture capitalist will receive million shares. (Round to three decimal places.)

Answer part 1 , 2 and 3 PLEASE PROVIDE TYPED ANSWERS. I NEED TYPED ANSWERS.Thank you. TYPED ANSWERS

Question 6 The startup PhoCo is going out to raise a B Round. However, as a co-founder, you need to be careful about pricing this round, based on clauses in your earlier rounds of funding. The company has raised 2 rounds of financing. Your first round, in the early days of the company, was a Seed Round of $650k in exchange for 300,000 shares, equal to 22% of the company. This was a typical seed round, with no Liquidation Preferences and no Anti-dilution clauses. The second round, which was very difficult to raise, was an A Round of $1.8 million, in exchange for 282,000 shares. Given the market at the time, you were forced to give the VCs Anti- dilution protection, but were able to avoid Liquidation Preferences. What price per share will you have to reach on the B Round to avoid the Anti-Dilution clause of the A Round being triggered? Please post your answer in dollars (not abbreviated), with no "$" dollar sign.

Task 4  Mr. M. Boy is the CEO of Money GmbH. His friends told him that the shares of Koinbase AG, which enables trading in a new type of cryptocurrency called "Litcoin", are particularly suitable for speculative purposes. Since he likes the name of the coin, he decides that Money GmbH will acquire shares of Koinbase AG worth €150k in t1. For a long-term investment, he also buys shares in Desla AG worth €200,000 on December 31. The performance of Desla AG shares is as follows: Mr. M.-Boy is not sure how Desla AG's share price could continue to evolve, as Desla AG's CEO, Mr. Helon Nusk, has often missed announced targets in the past. Mr. M.-Boy is interested in the highest possible annual result at t2. Money GmbH's balance sheet date is December 31. a) How should the shares of Desla AG be committed at t2? Justify your action!  b) The share price of Koinbase AG has also fallen rapidly. The total market price of the shares is only 80 T€. How to close the end of t2? Justify your action!  c)…

Starware Software was founded last year to develop software for gaming applications. The founder initially invested $900,000 and received 8 million shares of stock. Starware now needs to raise a second round of​ capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.40 million and wants to own 12% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 12% of the​ company? What is the implied price per share of this funding​ round? b. What will the value of the whole firm be after this investment​ (the post-money​ valuation)?

Starware Software was founded last year to develop software for gaming applications. The founder initially invested $900,000 and received 10 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.20 million and wants to own 39% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 39% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)?

Starware Software was founded last year to develop software for gaming applications. The founder initially invested $700,000 and received 9 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.20 million and wants to own 13% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 13% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)? a. How many shares must the venture capitalist receive to end up with 13% of the company? The venture capitalists will receive million shares. (Round to three decimal places.)

uestion 4 XYZ is a biotech company. The founder believes they can sell the company for $50 million in four years. They need $5 million in capital now, and the founder currently holds 1 million shares. The discount rate is 50%. What is the stock price the VC should pay for the investment? A. 3.02 B. 4.88 C. 5.53

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Help Save & Ex Chee Ethelbert.com is a young software company owned by two entrepreneurs. It currently needs to raise $918,400 to support its expansion plans. A venture capitalist is prepared to provide the cash in return for a 40% holding in the company. Under the plans for the investment, the VC will hold 16,400 shares in the company and the two entrepreneurs will have combined holdings of 24,600 shares. a. What is the total after-the-money valuation of the firm? (Enter your answer in dollars not millions.) Valuation of the firm b. What value is the venture capitalist placing on each share? Value of each share < Prev 2 of 8 Next m arch hp 寻

6. Your robotic automation start-up, Kela Controls, has raised capital as follows: Funding Round Pre-Money Post-Money Series A $8 million $12 million Series B $25 million $40 million Series C $100 million $150 million a. How much did Kela raise in each round? b. Assuming no other securities were issued, what fraction of the firm's shares were held by common shareholders (founders and employees) after each round? c. What is the distribution of ownership across each security after the Series C financing? d. If the firm is ultimately sold for $500 million, what multiple of money did each series earn? What will founders and employees receive? (Assume all preferred shares convert to common.)

6. Venture Capital. Here is a difficult question: Pickwick Electronics is a new high-tech company financed entirely by 1 million ordinary shares, all of which are owned by George Pickwick. The firm needs to raise $1 million now for stage 1 and, assuming all goes well, a further $1 million at the end of 5 years for stage 2. First Cookham Venture Partners is considering two possible financing schemes: ∙ Buying 2 million shares now at their current valuation of $1. ∙ Buying 1 million shares at the current valuation and investing a further $1 million at the end of 5 years at whatever the shares are worth. The outlook for Pickwick is uncertain, but as long as the company can secure the additional finance for stage 2, it will be worth either $2 million or $12 million after completing stage 2. (The company will be valueless if it cannot raise the funds for stage 2.) Show the possible payoffs for Mr. Pickwick and First Cookham, and explain why one scheme might be preferred. Assume an interest…

You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.56 million shares. The VC offers $1.03 million for 820,000 new shares. b. What is the​ post-money valuation? c. What fraction of the firm will you own after the​ investment?

The startup management is looking to raise venture capital. The pre-money valuation is $10,000,000 with two co-founders holding 40% of the shares each and two investors holding 10% respectively. Now, the platform receives a venture capital injection of $10,000,000. Answer the following questions:   i. What is the post-money valuation in $? ii. How much equity does each founder hold in % and $ after the capital injection? iii. How much equity does the venture capital firm hold in % and $ after the capital injection?

You founded your firm with a contribution of $500000, receiving 500000 shares of stock. Since then, you sold 50000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest 15M and would receive 1000000 newly issued shares. What is the value of your shares? $15,000,000 $23,250,000 $9,500,000 $7,500,000

Q.An all-equity company is considering borrowing $10,000,000 and using the borrowed funds to repurchase shares. The company's cost of equity is 9%. EBIT is expected to be $3,600,000 every year forever. Assume all available earnings are immediately distributed to common shareholders and all the M&M assumptions are satisfied. If the company proceeds with the capital restructing, what will be the value of the company according to M&M Proposition I without taxes?

Your start-up company needs capital. Right now, you own 100% of the firm with 9.99 million shares. You have received two offers from venture capitalists. The first offers to invest $2.99 million for 1.03 million new shares. The second offers $1.95 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 offer? d. What is the dilution per dollar invested for each offer? a. What is the first offer's post-money valuation of the firm? The first offer's post-money valuation will be $. (Round to the nearest dollar.)

You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.96 million shares. The VC offers $1.12 million for 820,000 new shares. a. What is the implied price per​ share? b. What is the​ post-money valuation? c. What fraction of the firm will you own after the​ investment?

Question 4 Global Internet company is looking to expand their operations. They are evaluating their cost of capital based on various financing options. Investment bankers informed them that they can issue new debt in the form of bonds at a cost of 8%, and issue new preferred stocks for the price of $25 per share paying $2.5 dividends per share. Their common stock is currently selling for $20 per share and will pay a dividend of $1.5 per share next year. They expect a growth rate in dividends of 5% per year, and their marginal tax rate is 35%. a) If Global raises capital using 45% debt, 5% preferred stock, and 50% common stock what is their cost of capital? b) If Global raises capital using 30% debt, 5% preferred stock, and 65% common stock what is their cost of capital? c) Evaluate the two finance options and identify which one they should choose? Assess the advantages and disadvantages of your choice?

Q.An unlevered company that has a current value of $1,600,000 is considering borrowing $700,000 and using the borrowed funds to repurchase shares. The company can borrow at 5% and has a cost of equity of 13%. EBIT is expected to remain the same every year forever. Assume all available earnings are immediately distributed to common shareholders and all the M&M assumptions are satisfied. What is the company's EBIT according to M&M Proposition I without taxes?

Paige...accounting question

Hi, I need help solving for Req 1, and cells A and B of Req 2. Thank you.

Farah’s Fine Fashions (FFF) is considering raising money through a rights offering.  FFF currently has 10 million shares outstanding selling for $22 per share.  Current shareholders will receive one right per share.  Four rights are required to buy one share for $20.  Will the rights be exercised and if so, how much money will FFF raise if all rights are exercised?  Select one: a.   The rights will not be exercised.     b. $4 million c. $40 million d. $50 million e. None of the above.