The rise of the capital in the funding round.

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Answer 1

Question

Chapter 23, Problem 6P

a.

Summary Introduction

To determine: The rise of the capital in the funding round.

b.

Summary Introduction

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

c.

Summary Introduction

To determine: The distribution of ownership across each security after Series C financing.

d.

Summary Introduction

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

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Q2. Suppose you are the chief financial officer of Toktik Co. and you are trying to determine the optimal capital structure for the company using the cost of capital approach. On the day of this exam, you have collected the following company and market data: The beta of the company is 2.6; • 10-year Treasury bond rate is 1.6% and the current market equity risk premium is 6.9%; • The company's current bond rating is BB by Standard & Poor's; • The firm currently has 5.2 billion shares outstanding with share price at $120 and the firm's market value of debt is $264 billion • The company's marginal tax rate is 35%. Also you are given the following table concerning the latest information on bond rating and the corresponding default spread: Default spread Rating AAA 0.69% AA 0.85% A+ 1.07% A 1.18% А- 1.33% BBB 1.71% BB+ 2.31% BB 2.77% B+ 4.05% 4.86% В- 5.94% ССС 9.46% CC 9.97% 13.09% D 17.44% Required: a) Briefly explain, by referencing relevant capital structure theories, the mechanisms…

To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the following data about the company's stock: D1 $1.45; PO = $25; and g = 6.50% (constant). What is the cost of common from issuing new stock, assuming the flotation cost is 10% of the stock price? = 13.59% 11.10% 12.94% 11.68% 12.30%

how to computer arket value per share using free cash flow evaluation.

Answer 2

Question

Chapter 23, Problem 6P

a.

Summary Introduction

To determine: The rise of the capital in the funding round.

b.

Summary Introduction

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

c.

Summary Introduction

To determine: The distribution of ownership across each security after Series C financing.

d.

Summary Introduction

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

Expert Solution & Answer

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Answer 3

Question

Chapter 23, Problem 6P

a.

Summary Introduction

To determine: The rise of the capital in the funding round.

b.

Summary Introduction

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

c.

Summary Introduction

To determine: The distribution of ownership across each security after Series C financing.

d.

Summary Introduction

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

Expert Solution & Answer

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Answer 4

Question

Chapter 23, Problem 6P

a.

Summary Introduction

To determine: The rise of the capital in the funding round.

b.

Summary Introduction

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

c.

Summary Introduction

To determine: The distribution of ownership across each security after Series C financing.

d.

Summary Introduction

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

Expert Solution & Answer

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Answer 5

Chapter 23, Problem 6P

a.

Summary Introduction

To determine: The rise of the capital in the funding round.

b.

Summary Introduction

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

c.

Summary Introduction

To determine: The distribution of ownership across each security after Series C financing.

d.

Summary Introduction

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

Answer 6

Chapter 23, Problem 6P

a.

Summary Introduction

To determine: The rise of the capital in the funding round.

Answer 7

Chapter 23, Problem 6P

a.

Summary Introduction

To determine: The rise of the capital in the funding round.

Answer 8

b.

Summary Introduction

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

Answer 9

b.

Summary Introduction

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

Answer 10

c.

Summary Introduction

To determine: The distribution of ownership across each security after Series C financing.

Answer 11

c.

Summary Introduction

To determine: The distribution of ownership across each security after Series C financing.

Answer 12

d.

Summary Introduction

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

Answer 13

d.

Summary Introduction

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 23.1 - Prob. 1CC Ch. 23.1 - Prob. 2CC Ch. 23.2 - Prob. 1CC Ch. 23.2 - Prob. 2CC Ch. 23.3 - List and discuss four characteristics about IPOs...Ch. 23.3 - Prob. 2CC Ch. 23.4 - Prob. 1CC Ch. 23.4 - What is the average stock price reaction to an...Ch. 23 - Prob. 1P Ch. 23 - What are the advantages and the disadvantages to a...

The rise of the capital in the funding round.

Solution Summary: The author calculates the rise of the capital in the funding round, based on the following data: Series A is 4,000,000, Series B is 15,000,000 and Series C is 50,000,000.

To determine: The rise of the capital in the funding round.

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

To determine: The distribution of ownership across each security after Series C financing.

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction:

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Chapter 23 Solutions

The rise of the capital in the funding round.

Solution Summary: The author calculates the rise of the capital in the funding round, based on the following data: Series A is 4,000,000, Series B is 15,000,000 and Series C is 50,000,000.

To determine: The rise of the capital in the funding round.

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round. Introduction:

To determine: The distribution of ownership across each security after Series C financing.

To determine: The multiple of money earned in each funding round series, and founder and employees. Introduction:

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Chapter 23 Solutions

To determine: The fractions of the firm’s shares were held by common shareholders after the funding round.

Introduction:

To determine: The multiple of money earned in each funding round series, and founder and employees.

Introduction: