Your start-up company needs capital. Right now, you own 100% of the firm with 9.99 million shares. You have received twa 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.)
Your start-up company needs capital. Right now, you own 100% of the firm with 9.99 million shares. You have received twa 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.)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation
Section: Chapter Questions
Problem 9MC
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Question
![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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fddc1b6fe-d197-4f97-866e-980311fdf259%2Fa28d310d-aa2b-4eb3-aeb9-8a853c19e496%2F3sp9ai_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.)
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