Find assumptions exit valuation and probability of sucess

Assignment Help Accounting Basics
Reference no: EM13120586

EBV is considering a $5M Series A investment in Newco. EBV proposes to structure the investment as 6M shares of convertible preferred stock. The employees of Newco have claims on 10M shares common stock.Thus, following the Series A investment, Newco will have 10M common shares outstanding and would have 16M shares outstanding on conversion of the CP. EBV estimates a 25% probability for a successful exit, with an expected time in 5 years and an exit valuation of $500M. The $100M EBV funds has annual fees of 2% for each of its 10 years and earns 20% carried interest on all profits. How sensitive is this recommendation to different assumptions about the exit valuation and the probability of success?

Reference no: EM13120586

Questions Cloud

Explain whether null hypothesis should be rejected : To explain this, be sure to explain whether the null hypothesis should be rejected, the likelihood of that decision being an error, and why it might have been an error.
What is your investment recommendation : ROSS is considering a $6M Series A investment in Newco. ROSS proposes to structure the investment as 3M shares of convertible preferred stock.
How many grams of excess reagent are present : Thirteen grams of titanium react with 60.0 g of bromine. How many grams of titanium(IV) bromide are produced, assuming 100% yield.
What is the probability of there being 2 aces in a single : What is the probability of there being 2 aces in a single column at the start of a Free Cell game? What about 3 and 4 aces in a single column? Conduct an experiment that validates your findings.
Find assumptions exit valuation and probability of sucess : EBV is considering a $5M Series A investment in Newco. EBV proposes to structure the investment as 6M shares of convertible preferred stock.
Illustrate what is the spring stiffness constant of spring : A 1300-{rm kg} car rolling on a horizontal surface has speed v = 50 km/h when it strikes a horizontal coiled spring and is brought to rest in a distance of 2.7 m. Illustrate what is the spring stiffness constant of the spring?
Radical expressions in real life : Consider how you might apply radical expressions to your daily life. Explain this application, and discuss what the equation might be.
Hardware platform of the target embedded systems : An embedded system is a computer system performing dedicated functions within a larger mechanical or electrical system. Embedded systems range from portable devices such as Google Glasses, to large stationary installations like traffic lights, fa..
Probability randomly chosen drivers coming to intersection : What is the probability that , of 20 randomly chosen drivers coming to an intersection under these conditions, a) At most 2 will come to a complete stop?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Treasury stock transactions-complete journal entries

Treasury Stock Transaction-Nature corporation engaged in the folloiwing treasury transactions during current year. Complete three journal entries to record these treasury stock transactions.

  Several events which influence the cash flows

Future cash flows are, in many cases, subject to change. List several events that could occur that might influence the cash flows in this situation.

  Information regarding ethics for managers

The Word for the study of Values in Philosophy is "Axiology," which has the same root as "Axiom" in mathematics. In Axiology, however, values are studied as to what motivates, inspires, of is responsible for human decision making.

  Essay on legal issues surrounding solyndra

Write down an essay on legal issues surrounding Solyndra, the California based solar panel manufacturer.

  Determining the units of product in inventory

The company's net income for the year was $12,000 higher under variable costing than under absorption costing. Given these facts, the number of units of product in inventory at the beginning of the year must have been:

  Best course of action from tax perspective

Tax professional to decide on the best course of action from a tax perspective on their issues. make a three page memo (at least 300 words per page) to John and Jane Smith addressing the issues presented.

  Exchange rate or spot rate under temporal method

What is the basis for deciding whether to use the spot rate or some other exchange rate when converting a foreign subsidiary's trial balance accounts into U.S. dollars under the temporal method?

  Identify long-term factors

MBA 640 Exam 1: Spring 1, 2014:  Determine whether Deep Blue should accept this special sales order. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order.

  How to invest in retirement account

Robert deposits $150 monthly into a retirement account that has an APR of 5% with monthly compounding. What will this be worth in 40 years from today if it has $5,000 in it today?

  Determining the variable overhead efficiency variance

The standard hours allowed for actual output of month totaled 7,070 machine-hours. What was the variable overhead efficiency variance for the month?

  Computing eps-dividend per share and book value

What is the EPS for the company if it has a P/E ratio of 20? What is the book value of the company if the price-to-book ratio is 1.5 and it has 100,000 shares of stock outstanding?

  Premium expense-inventory of premiums

Bonita places a coupon in each box of its product. Customers may send in five coupons and $3-A total of 400,000 boxes of product were sold in 2010. It was estimated that 6% of the coupons would be redeemed.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd