FUNDAMENTALS OF FINANCE(LL)
FUNDAMENTALS OF FINANCE(LL)
9th Edition
ISBN: 9781260477184
Author: BREALEY
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Chapter 15, Problem 1QP

a.

Summary Introduction

To calculate: The number of shares to be sold to raise $500,000.

a.

Expert Solution
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Explanation of Solution

Company's needed capital = $500,000Price per share = $0.40No of shares to be sold =(500000/0.40)=$12,50,000.

b.

Summary Introduction

To calculate: The fraction of the firm owned by the person after venture capital investment.

b.

Expert Solution
Check Mark

Explanation of Solution

The number of shares owned by the person = 10,00,000The number of shares owned by the venture capital = 12,50,000The share of the person's ownership in the company = (1000000(1000000+1250000))=44.4%

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It is now January 1. You plan to make a total of 5 deposits of $500 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 14% but uses semiannual compounding. You plan to leave the money in the bank for 10 years. Round your answers to the nearest cent. 1. How much will be in your account after 10 years? 2. You must make a payment of $1,280.02 in 10 years. To get the money for this payment, you will make five equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 14% with quarterly compounding. How large must each of the five payments be?
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