EBK CORPORATE FINANCE
4th Edition
ISBN: 8220103145947
Author: DeMarzo
Publisher: PEARSON
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Question
Chapter 23, Problem 5P
a.
Summary Introduction
To determine: The pre-money valuation for the Series D funding round.
Introduction: Pre-money valuation is the valuation of the firm before it receives new financing or investments.
b.
Summary Introduction
To determine: The post-money value for the Series D funding round.
c.
Summary Introduction
To determine: The percentage of firm owned after the last funding round.
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Students have asked these similar questions
Three years ago, you founded your own company. You invested $108,000 of your own money and received 5.4 million
shares of Series A preferred stock. Your company has since been through three additional rounds of financing.
Price ($)
0.70
Round
Series B
Series C
Series D
2.00
3.50
Number of Shares
1,100,000
600,000
500,000
a. What is the pre-money valuation for the Series D funding round?
b. What is the post-money valuation for the Series D funding round?
7. You invest $7,873 in stock and receive $102, $123, $121, and $155 in dividends over the following 4 years. At the end of
the 4 years, you sell the stock for $11,900. What was the IRR on this investment?
Review Only
Click the icon to see the Worked Solution (Calculator Use).
Click the icon to see the Worked Solution (Spreadsheet Use).
The IRR on this investment is
%. (Round to the nearest whole percent.)
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.
Chapter 23 Solutions
EBK CORPORATE FINANCE
Ch. 23.1 - Prob. 1CCCh. 23.1 - Prob. 2CCCh. 23.2 - Prob. 1CCCh. 23.2 - Prob. 2CCCh. 23.3 - List and discuss four characteristics about IPOs...Ch. 23.3 - Prob. 2CCCh. 23.4 - Prob. 1CCCh. 23.4 - What is the average stock price reaction to an...Ch. 23 - Prob. 1PCh. 23 - What are the advantages and the disadvantages to a...
Ch. 23 - Prob. 3PCh. 23 - Suppose venture capital firm GSB partners raised...Ch. 23 - Prob. 5PCh. 23 - Prob. 6PCh. 23 - Prob. 7PCh. 23 - Prob. 8PCh. 23 - Prob. 9PCh. 23 - Prob. 10PCh. 23 - Prob. 11PCh. 23 - Prob. 12PCh. 23 - What is IPO underpricing? If you decide to try to...Ch. 23 - Prob. 14PCh. 23 - Prob. 15PCh. 23 - Prob. 16PCh. 23 - Prob. 17PCh. 23 - Prob. 18PCh. 23 - Prob. 19PCh. 23 - Prob. 20P
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