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Chapter 23, Problem 8P

a.

Summary Introduction

To determine: The amount that will be received by Series A, Series B, and common shareholders if BB is sold for $85,000,000.

Introduction:

Liquidation is a procedure by which a company  dissolves. The assets and property of the company are redistributed to their debt holder and shareholder.

b.

Summary Introduction

To determine: The amount that will be received by Series A, Series B, and common shareholders if BB is sold for $100,000,000.

c.

Summary Introduction

To determine: The amount that will be received by Series A, Series B, and common shareholders if BB is sold for $200,000,000.

d.

Summary Introduction

To determine: The amount that will be received by Series A, Series B, and common shareholders if BB is sold for $200,000,000.

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On January 2008, your firm raised $10 mill in Series A financing with a 2x liquidation preference, no participation rights, and a $25 post-money valuation. On January 2010, your firm raised $20mill in Series B (less senior) financing with a 1x liquidation preference, no participation rights, and a $40 post-money valuation.   What would be the minimum sale price of the firm such that every investor converts?  a. 40 b. 100 c. 75 d. 50
Suppose that a bank purchased 15 million shares of Company E. The shares are bid $34.2 and offer $35.4. The mean and standard deviation of the bid-ask spread are 0.034483 and 0.054, respectively. What is the cost of liquidation that we are 99% confident will not be exceeded (i.e., in a stressed market condition)? O 2.402 O 0.259 O 1.201
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