7 years ago, you founded your firm with $300,000 and 4 million shares. 5 years ago, you sold 1.5 million primary shares at a price of $0.62 per share. 3 years ago, you sold 1 million secondary shares of your own stock for a price of $0.98 per share. Today, a venture capital firm offers you $1.42 per share for 3 million primary shares. If you accept the offer, what is the value of the shares you still hold?

7 years ago, you founded your firm with $300,000 and 4 million shares. 5 years ago, you sold 1.5 million primary shares at a price of $0.62 per share. 3 years ago, you sold 1 million secondary shares of your own stock for a price of $0.98 per share. Today, a venture capital firm offers you $1.42 per share for 3 million primary shares. If you accept the offer, what is the value of the shares you still hold?

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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