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 %
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 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![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
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8e615c75-2a0b-4a42-8159-bcac2309173b%2F496de25f-5c53-41e4-8c11-152c79ba99be%2F2q7xhhc_processed.png&w=3840&q=75)
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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