You have started a company and are in luck-a venture capitalist has offered to invest. You own 100% of the company with 5.39 million shares. The VC offers $1.06 million for 850,000 new shares. a. What is the implied price per share? b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?
You have started a company and are in luck-a venture capitalist has offered to invest. You own 100% of the company with 5.39 million shares. The VC offers $1.06 million for 850,000 new shares. a. What is the implied price per share? b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?
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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Transcribed Image Text:You have started a company and are in luck-a venture capitalist has offered to invest. You own 100% of the company with 5.39 million shares. The VC offers $1.06 million for 850,000 new shares.
a. What is the implied price per share?
b. What is the post-money valuation?
c. What fraction of the firm will you own after the investment?
a. What is the implied price per share?
The implied price per share will be $ per share. (Round to the nearest cent.)
b. What is the post-money valuation?
The post-money valuation will be $
c. What fraction of the firm will you
Your fractional ownership will be
million. (Round to two decimal places.)
own after the investment?
%. (Round to one decimal place.)
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