i want accurate answer with proper explanation no handwriting only typed answer QUESTION 2 "You founded your firm with a contribution of $500,000, receiving 2,000,000 shares of stock. Since then, you sold 6,000,000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $7,000,000 and would receive 5,000,000 newly issued shares. If this is the VC's first investment in the company, what percentage of the firm will they end up owning? Note: Express your answers in strictly numerical terms. For example, if the answer is 5 percent, enter 0.05 as an answer."

i want accurate answer with proper explanation no handwriting only typed answer QUESTION 2 "You founded your firm with a contribution of $500,000, receiving 2,000,000 shares of stock. Since then, you sold 6,000,000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $7,000,000 and would receive 5,000,000 newly issued shares. If this is the VC's first investment in the company, what percentage of the firm will they end up owning? Note: Express your answers in strictly numerical terms. For example, if the answer is 5 percent, enter 0.05 as an answer."

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 17QTD

See similar textbooks

Similar questions

A founder owns 100% of her startup. She is offered an equity investment by a VC investor, accepts, and eventually undergoes one more round of financing with a new VC investor. The financing events are as follows: VC investor 1 steps in with $0.5 million at a pre-money value of $2 million; later, VC investor 2 contributes $3 million at a pre-money of $7 million. After the second round of investment, what is the worth in stock of the founder, of VC1, and of VC2? What percentage of the company does each own?
Can I get help with part D please... An online medical advice company just completed an IPO with an investment bank on a firm-commitment basis. The firm issued five million shares of common stock, and the underwriting fees were $1.90 per share. The offering price was $25.10 per share. Total proceeds from common stock sale $125,500,000.00 Net proceeds to firm $116,000,000.00 (d)How much money did the investment bank receive in fees? Underwriting spread $
You founded your firm with a contribution of $700,000, receiving 1,000,000 shares of stock. Since then, you sold 5,000,000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $7,000,000 and would receive 5,000,000 newly issued shares. What is the post-money valuation? Express the terms of your answer completely and in strictly numerical terms. For example: If your answer is one million dollars, write: 1000000.
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)…
An entrepreneur first started his business with $100,000. Later, a venture capitalist (VC) agrees to invest $300,000 to sustain the growth. In return, this VC will take up a 50% equity position in the firm. How much is this business worth now? (Show your calculations)
You are an entrepreneur that founded your IT company three years ago. You invested $100.000 and received 5 million shares of series A stock. Your companyhas been through three additional rounds of financing: Round price number of shares b 0.5 1000000 c 2 500000 d 4 500000 1. What is the Pre-Money Valuation for the series D funding round?2. What is the Post- Money Valuation for the series D funding round?3. Considering that you own the 5 million shares of Serie A round what percentage of the firm you own after serie D round?
A tech firm that has developed a new type of internet browser is planning an IPO of 7,000,000 shares of common stock. The investment banking house that is underwriting the IPO has presented the tech firm with two possible plans of action: Plan 1: An underwritten offer of $10.00 per share plus a fee of 6% of the gross proceeds. Plan 2: A best efforts offering at $10.25 per share. An underwriting commission of 2.4% plus $119,000 will be paid to the investment bank. The investment bank is expecting to sell 96% of the offering. What are the net proceeds to the tech firm if they choose Plan 1? (Do not round intermediate calculations. Round your answer to a whole number.)
solve in excel if possible! Need both answers The owner of Gator Airlines wishes to take her stock public for the first time by selling 3 million shares. The underwriter determines that the true value will be $15 with probability .4 and $8 with probability .6. There are a group of uninformed investors who are willing to order 6 million shares as long they pay no more than the expected true value. They also assess the probability of the true value of the shares being $15 with probability .4 and $8 with probability .6. There is a group of informed investors who always know whether the true value is $15 or $8. They are willing to order 2 million shares if the offer price is less than the true value. . 1) Calculate the highest offer price at which the entire issue will always sell. 2) Is the new issue price below the expected true value of the shares? If so, could an uniformed investor make money on average by submitting an order to buy some shares of the new issue? Why or why not
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?
Ethelbert.com is a young software company owned by two entrepreneurs. It currently needs to raise $1,746,400 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 23,600 shares in the company and the two entrepreneurs will have combined holdings of 35,400 shares. a. What is the total after-the-money valuation of the firm? (Enter your answer in dollars not millions.) b. What value is the venture capitalist placing on each share?
Bruce Wayne is going public with his new business. Berkman Investment Bank will be his banker and is doing a best efforts sale with a 3.8% commission fee. The SEC has authorized Wayne 4,790,000 shares for this issue. He plans to keep 1,180,000 shares for himself, hold back an additional 240,000 shares according to the green-shoe provision for Berkman Investment Bank, pay off Venture Capitalists with 530,000 shares, and sell the remaining shares at $16.46 a share. Given the bids at the auction distribute the shares to all bidders using a pro-rata share procedure, and assume Berkman Investment Bank takes its green-shoe shares. What is the total cash flow to Wayne after the sale? To Berkman Investment Bank? Bidder Quantity Bid Gotham Pension Fund 1,990,000 Clark Kent Investors 1,250,000 Central City Insurance 610,000 Arthur Curry 440,000 Barry Allen 350,000 Total 4,640,000
Identify information used in an investment decision Look forward to the daywhen you will have accumulated $5,000, and assume that you have decided to investthat hard-earned money in the common stock of a publicly owned corporation. Whatdata about that company will you be most interested in, and how will you arrangethose data so they are most meaningful to you? What information about the company will you want on a weekly basis, on a quarterly basis, and on an annual basis?How will you decide whether to sell, hold, or buy some more of the firm’s stock?