In its first round of venture funding, SlickBrud received $2 million from a single venture capital firm, DreamVorks, to which it allocated 20 million shares. In a subsequent round, SlickBrud raised $8 million by releasing another 20 million shares to a new venture capital firm. As a result, the equity share of DreamVorks dropped to 20%. Which of the following statements is correct? (Pick one).

In its first round of venture funding, SlickBrud received $2 million from a single venture capital firm, DreamVorks, to which it allocated 20 million shares. In a subsequent round, SlickBrud raised $8 million by releasing another 20 million shares to a new venture capital firm. As a result, the equity share of DreamVorks dropped to 20%. Which of the following statements is correct? (Pick one).

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Moonscape has just completed an initial public offering. The firm sold 3 million shares at an offer price of $12 per share. The underwriting spread was $0.30 a share. The price of the stock closed at $18.00 per share at the end of the first day of trading. The firm incurred $300,000 in legal, administrative, and other costs. What were flotation costs as a fraction of funds raised? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Flotation cost as percent of funds raised %
Roundtree Software is going public using an auction IPO. The firm has received the following bids: Price ($) Number of Shares 14.60 140,000 14.40 200,000 14.20 560,000 14.00 1,000,000 13.80 1,280,000 13.60 880,000 420,000 13.40 Roundtree had previously believed it would issue 1,900,000 shares, however, if Roundtree decides to issue an extra 488,000 shares (for a total of 2,388,000 shares), how much total money will it raise? Roundtree will raise a total amount of $ million (Round to one decimal place.)
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)?
Qd 112.
For the following four IPOs, please find the total amount raised, the amount that went to the firm, and the amount that went to the underwriters/investment banks, and the gross spread. This information is available on the SEC Edgar database. Total S Amount S Raised by the SAmount Paid to S Offer S Bid Gross Raised Investment Banks Price Price Issuer Spread % Wingstop Shake Shack Alibaba Wingstop
Cullumber, Inc., a high-technology firm in Portland, raised a total of $60 million in an IPO. The company received $27 of the $30 per share offering price. The firm’s legal fees, SEC registration fees, and other out-of-pocket costs were $350,000. The firm’s stock price increased 17 percent on the first day of trading. What was the total cost to the firm of issuing the securities?
Having heard about IPO underpricing, I put in an order to my broker for 1, 120 shares of every IPO he can get for me. After 3 months, my investment record is as follows: IPO Shares Allocated to Me Price per Share Initial Return A 620 $ 10 6 % В 320 20 14 C 1, 1208-3D0 12 23 a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue.
You are trying to estimate the intrinsic value of the shares of Flying High Ltd, a manufacturer of unmanned aerial vehicles, or drones. The company is headquartered in Melbourne, and sells its drones throughout Australia and New Zealand. It is a public company, but is not yet listed on the stock exchange. There are 30,000 shares outstanding. The most recent dividend was $2.6. The required rate of return for equity is 18.97%. Book value of equity, per share, as at 31 December 2021 was $25.97. You have come up with the following forecasts: - Earnings are expected to grow at 3.9% in perpetuity. - The firm's Return on Equity is expected to remain constant at 23.46%. What is the estimated value of the shares using a Residual Income Discount Model? a. $33.71 b. $32.51 c. $31.68 d. $32.00
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 $2.20 per share. The offering price was $27.60 per share. (a) Your answer is correct. What were the total proceeds from the common-stock sale? Total proceeds $ 138.000,000 eTextbook and Media Attempts: 2 of 3 used (b) How much money did the company receive? Net proceeds to firm $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) The parts of this question must be completed in order. This part will be available when you complete the part above.
After unexpectedly hosting an event for an out-of-favour political candidate, Four Seasons Total Landscaping expects to see its profits steadily decline each year going forward. Having recently paid its annual dividend of $$21.2521.25 per share, shares of Four Seasons Total Landscaping currently trade at a market price of $$77.0277.02 each. After analysing its business, you determine that the appropriate cost of equity capital for the firm is 18.118.1% per annum due to relatively high levels of fixed costs and debt financing. Based on the above information, at what rate per annum does the market seem to believe that the dividends of Four Seasons Total Landscaping will decrease? The annual dividends are expected to decline in size by % per annum.(Round to FOUR decimal places)
The last three experts have got it wrong. Please help.

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