Simone founded her company using $175,000 of her own money, issuing herself 300,000 shares of stock. An angel investor bought an additional 200,000 shares for $125.000 She now sells another 450,000 shares of stock to a venture capitalist for $1.5 million What is the post-money valuation of the company? OA $4,749.999 OB. $1,741,666 OC. $1,583,333 OD. $3,166,666

Simone founded her company using $175,000 of her own money, issuing herself 300,000 shares of stock. An angel investor bought an additional 200,000 shares for $125.000 She now sells another 450,000 shares of stock to a venture capitalist for $1.5 million What is the post-money valuation of the company? OA $4,749.999 OB. $1,741,666 OC. $1,583,333 OD. $3,166,666

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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Nirvana have net income of $1,000,000. They pay preferred dividends of 100,000 during the year and have 200,000 in income attributable to non-controlling interests. They have 10,000 shares outstanding at the beginning of the year and issue 2,000 shares on April 1 and buy back 8,000 treasury shares at a cost of $10 a piece on October 1. What is Nirvana's EPS?
Vijay
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Assume that Yelp decides to launch a new website to market discount bookkeeping services to consumers. This chain, named Aladin, requires $500,000 of start-up capital. The founder contributes $375,000 of personal assets in return for 15,000 shares of common stock, but he must raise another $125,000 in cash. There are two alternative plans for raising the additional cash. ∙ Plan A is to sell 3,750 shares of common stock to one or more investors for $125,000 cash. ∙ Plan B is to sell 1,250 shares of cumulative preferred stock to one or more investors for $125,000 cash (this preferred stock would have a $100 par value, have an annual 8% dividend rate, and be issued at par). 1. If the new business is expected to earn $72,000 of after-tax net income in the first year, what rate of return on beginning equity will the founder earn under each alternative plan? Which plan will provide the higher expected return? 2. If the new business is expected to earn $16,800 of after-tax net income in the…
Three years ago, you founded your own company. You invested $120,000 of your own money and received 6.0 million shares of Series A preferred stock. Your company has since been through three additional rounds of financing. Series B Series C Series D Round Price ($) 0.55 3.00 3.00 Number of Shares 1,000,000 650,000 600,000 Assuming that you own only the Series A preferred stock (and that each share of all series of preferred stock is convertible into one share of common stock), what percentage of the firm do you own after the last funding round? After the last funding round, you will own %. (Round to one decimal place.) CE
Assume that an investor short-sells 600 shares of stock at a price of $45 a share, making a 50 percent margin deposit. A year later, she repurchases the borrowed shares at $30 a share. How much of her money did the short-seller have to put up to make this transaction?$ How much money did the investor make, or lose, on this transaction? Ignore margin interest.$ What rate of return did she make on her invested capital (see part a)? Ignore margin interest. Round the answer to two decimal places. %
Three years ago, you founded Outdoor Recreation, Inc., a retailer specializing in the sale of equipment and clothing for recreational activities such as camping, skiing, and hiking. So far, your company has gone through three funding rounds: Round Founder Seed Series A Date Feb. 2020 Aug. 2021 Sept. 2022 Investor Shares Share Price ($) You Angels Venture Capital 5,000,000 1,000,000 4,000,000 1.00 2.00 3.50 Currently, it is 2023 and you need to raise additional capital to expand your business. You have decided to take your firm public through an IPO. You would like to issue an additional 6.0 million new shares through this IPO. You currently have $5.0 million in cash (net of debt), and forecast earnings before interest and taxes of $7.5 million this year. a. Your investment banker advises you that the prices of other recent IPOs have been set such that the enterprise value/EBIT ratios based on 2023 forecasted earnings average 20.0 x. Assuming that your IPO is set at a price that implies…
Melanie founded her company using $250,000 of her own money, issuing herself 100,000 shares of stock. An angel investor bought an additional 50,000 shares for $350,000. She now sells another 190,000 shares to a venture capitalist for $750,000. What percentage of the firm does Melanie now own? OA. 19% OB. 38% O C. 50% O D. 29% O E. 33% C
Taylor bought x shares of a stock that sold for $31.50 per share. He paid a 2% commission on the sale. The total cost of his investment, including the broker fee, was $4,160.70. How many shares did Taylor purchase?
Suppose a Sam's company in CA, completes an $95 million IPO priced to the public at $50 per share. The firm receives $47 per share, and the out-of-pocket expenses are $480,000. The stock’s closing price at the end of the first day is $59. What is the total cost to the firm of issuing the securities? $_______

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