You founded your firm with a contribution of $500000,receiving 500000 shares of stock. Since then, you sold 50000stocks to Angel Investors. Now you are considering raisingmore capital from a Venture Capitalist. They will invest 15Mand would receive 1000000 newly issued shares.What is the value of your shares?$15,000,000$23,250,000$9,500,000$7,500,000

Number of shares you have = 500,000Recent investment by venture capitalist = $15,000,000 by…

Answered: You founded your firm with a…

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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Finding the WACC. Monica is the CFO of Cooking for Friends (CFF) and uses the pecking order hypothesis philosophy when she raises capital for company projects. Currently, she can borrow up to $450,000 from her bank at a rate of 7.75%, float a bond for $800,000 at a rate of 10%, or issue additional stock for $1,500,000 at a cost of 15%. What is the WACC for CFF if Monica chooses to invest A. $900,000 in new projects? B. $200,000 in new projects? C. $2,750,000 in new projects?
CHAPTER 13) Cheesecakes.jpgOne day, you decided to buy shares of stock from your two all time favorite companies, the Cheesecake Factory and Apple. The expected return on the Cheesecake Factory's stock is 8% per year. The expected return on Apple's stock is 16.3% per year. You bought 43 shares of the Cheesecake Factory's stock for $69 per share. You bought 42 shares of Apple's stock for $165 per share. What is the expected return on your portfolio investment? Calculate the answer in percent, but don't type the "%" sign. Don't round your intermediate steps, and only round your final answer to TWO decimal places. For example, if you got 12.34%, then type 12.34.
Six months ago, you purchased 3,000 shares of ABC stock for $47.06 a share. You have received dividend payments equal to $0.80 a share. Today, you sold all of your shares for $49.74 a share. What is your total dollar return on this investment? $2,400 $10,050 $8,040 $10,440 $20,880
You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $100,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.40 each. How many shares will you need to sell to raise the additional $500,000? Note: Enter your answer in whole numbers, not in millions. What fraction of the firm will you own
You are considering how to invest part of your retirement savings.You have decided to put$100,000 into three stocks: 55% of the money in GoldFinger (currently $24/share),23%of the money in Moosehead (currently$85/share),and the remainder in Venture Associates (currently $3/share).Suppose GoldFinger stock goes up to $33/share, Moosehead stock drops to $66/share, and Venture Associates stock rises to $5 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?
Mike wants to invest in a business in the manufacturing sector. He needs to understand the value of this company's shares as the recent annual dividend was N$2.50 per share(D0=N$2.50) and the required return is 12%. Find the market value of Textile CC shares under the following; 15.1. If dividends are expected to grow at a constant annual rate of 8% to infinity. 15.2 Dividends are expected to grow at an annual rate of 5% for each of the next 4 years, followed by a constant annual growth rate of 6% in years 5 to infinity 15.3 Dividends are expected to grow at an annual rate of 0% to infinity.
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.
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?
K You are considering how to invest part of your retirement savings. You have decided to put $600,000 into three stocks: 52% of the money in Gold Finger (currently $28/share), 22% of the money in Moosehead (currently $96/share), and the remainder in Venture Associates (currently $4/share). Suppose Gold Finger stock goes up to $45/share, Moosehead stock drops to $65/share, and Venture Associates stock rises to $5 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights? a What is the new value of the portfolio?

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