You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $120,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $1.05 each. a. How many shares will you need to sell to raise the additional $1,449,000? (Enter your answer in whole numbers, not in millions.) Shares b. What fraction of the firm will you own after the VC investment? (Enter your answer as a percent rounded to 1 decimal place.) Percentage of shares owned %

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $120,000
plus the idea for your new product.
Suppose that when you first approach your friendly VC, he decides that your shares are worth only $1.05 each.
a. How many shares will you need to sell to raise the additional $1,449,000? (Enter your answer in whole numbers, not in millions.)
Shares
b. What fraction of the firm will you own after the VC investment? (Enter your answer as a percent rounded to 1 decimal place.)
Percentage of shares owned
%
Transcribed Image Text:You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $120,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $1.05 each. a. How many shares will you need to sell to raise the additional $1,449,000? (Enter your answer in whole numbers, not in millions.) Shares b. What fraction of the firm will you own after the VC investment? (Enter your answer as a percent rounded to 1 decimal place.) Percentage of shares owned %
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