The firm you founded currently has 13 million shares, of which you own 6 million. You are considering an IPO where you would sell 2 million shares for $16 each. If all of the shares sold are primary shares, how much will the firm raise? What will your percentage ownership of the firm be after the IPO? If all of the shares sold are primary shares, the firm will raise $ million. (Round to one decimal place.) What will your percentage ownership of the firm be after the IPO?
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- Your Company has 100 million of common stock shares outstanding and is planning a 10 million shares SEO. At the time of the announcement, the stock was $20 per share. Of these 10 million shares sold: 8 million shares are shares being sold by your company and the remaining shares are sold by original investors in your company (venture capitalists). Underwriter’s charge is expected to be 3% of the gross proceeds. How much money will your company raise? In real market conditions: a) will your company raise more or less to your answer above? b) likely time to implement/execute this SEO? Explain briefly.Marseille Manufacturing (MM) is considering an IPO. MM currently has 13 million shares outstanding and I currently own 8 million of those shares. MM plans to sell 3 million shares in the IPO. If all the new shares are primary shares, then what will my new ownership percentage be? If I decide to replace some of the primary shares with some of my shares as secondary shares in the IPO, then how many of my shares can I sell and still maintain 50% ownership?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?
- 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?Just Right Incorporated is considering the option of an extra dividend versus a share repurchase and the impact of both decisions on the firm. Just Right plans to spend $85,000 in respect of both scenarios. Just Right’s current earnings are $2.10 per share, and the stock currently sells for $45 per share. Just Right currently has 5,000 shares outstanding.You own one share of stock in this company.If the company issues the dividend, what will your total investment be worth?Starware Software was founded last year to develop software for gaming applications. The founder initially invested $800,000 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 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)?
- Assuming Nike's stock price is $68 per share, shares outstanding are $1,600 million, and the company plans to raise $1,000 million in capital with a projected EBIT of $10 billion, how many new shares must Nike sell?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)?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.
- The current market value of a firm’s share is $32 million, with 20 million shares outstanding. The net profit after tax is estimated to be $5 million. Investors are willing to pay a value equivalent to 20 times of the firm’s earnings. Based on the price-earnings multiple valuation model, are the firm’s shares fairly priced? Should an investor buy the share? Explain why.ust Right Incorporated is considering the option of an extra dividend versus a share repurchase and the impact of both decisions on the firm. Just Right plans to spend $85,000 in respect of both scenarios. Just Right’s current earnings are $2.10 per share, and the stock currently sells for $45 per share. Just Right currently has 5,000 shares outstanding. You own one share of stock in this company. If the company issues the dividend, what will your total investment be worth? If the company pursues a share repurchase what will be your total investment be worth? Kindly Ignore taxes and other imperfections.The Rufus Corporation has 125 million shares outstanding and analysts expect Rufus to have earnings of $500 million this year. Rufus plans to pay out 40% of its earnings in dividends and they expect to use another 20% of their earnings to repurchase shares. If Rufusʹ equity cost of capital is 15% and Rufusʹ earnings are expected to grow at a rate of 3% per year, then the value of a share of Rufus stock is closest to: