You have negotiated a $500.000 Convertible Debt loan from an Angel group. It is convertible into stock when you raise yournext equity round, and will convert at a price which is a 25% discount to the next round's premoney valuation. It has a Cap ot$7mm on the Conversion Valuation. A year later, you raise your first equity round at a premoney valuation of Samm. Whatpremoney valuation of your company is used to calculate the conversion of the Angels' loan into equity?O 57.5mmCt365mmO S7mmO $8.5mmO Sómm

Equity: Equity can refer to stock or ownership of shares in a public firm, or it can refer to the…

You have negotiated a $500.000 Convertible Debt loan from an Angel group. It is convertible into stock when you raise your next equity round, and will comvert at a price which is a 25% discount to the next round's premoney valuation. It has a Cap of $7mm on the Conversion Valuation. A year later, you raise your first equity round at a premoney valuation of S8mm, What premoney valuation of your company is used to calculate the conversion of the Angels loan into equity? O $7.5mm 0365mm O S7mm O $8.5mm Somm

You have negotiated a $500.000 Convertible Debt loan from an Angel group. It is convertible into stock when you raise your next equity round, and will comvert at a price which is a 25% discount to the next round's premoney valuation. It has a Cap of $7mm on the Conversion Valuation. A year later, you raise your first equity round at a premoney valuation of S8mm, What premoney valuation of your company is used to calculate the conversion of the Angels loan into equity? O $7.5mm 0365mm O S7mm O $8.5mm Somm

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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Question

You have negotiated a $500.000 Convertible Debt loan from an Angel group. It is convertible into stock when you raise your
next equity round, and will convert at a price which is a 25% discount to the next round's premoney valuation. It has a Cap ot
$7mm on the Conversion Valuation. A year later, you raise your first equity round at a premoney valuation of Samm. What
premoney valuation of your company is used to calculate the conversion of the Angels' loan into equity?
O 57.5mm
Ct365mm
O S7mm
O $8.5mm
O Sómm

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