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Liquidation Proceeds Exercise—A mature company’s founders and investors are considering several harvest proposals. The company was founded in March 2013 with $ 200,000 in founder funds and $ 300,000 in family loans (8% interest annual interest accrued & due @ HARVEST). The company raised $ 2,000,000 from a Shark Tank Investor in March 2015. The Shark owns 1,000,000 shares of 6% cumulative dividend, participating convertible Preferred Stock, on which no dividends have been paid. The Shark’s interest represents a 45% equity interest in the company. The Shark’s Preferred Stock Investment is subject to a 3 X proceeds CAP; and has a 1.5 X Liquidation Preference. One buyer has proposed to purchase all equity in the firm for a net payment amount of $11,000,000. How will the $ 11,000,000 be distributed if the Shark does not convert the Preferred Stock (meaning she EXERCISES the Liquidation Preference)? (Think about what must be paid out of the proceeds before equity stakes are calculated and divided). Questions: 1. Family Lenders Get: 2. Shark gets: 3. Founder gets: 4. What annualized RETURN (this is a %) will the FOUNDER have earned if this deal is accepted; and proceeds are distributed in March 2018?
Explain the challenge or task of "Crossing the Chasm" terms of the business and financial challenges facing early stage technologies.
Why would MNCs desire to enter such countries? If these countries relaxed their restrictions, would their economies continue to be independent of other economies? Explain.
On January 1, you purchased 10,000 shares of a stock at $15 ½ per share. Your realized return for this period is:
Mark bought a stock today for $17 per share. Mark's will be able to sell the stock in 10 years for $97 per share. In this case, what interest rate, in percent, would Mark earn on this investment?
Which of the following is NOT a potential problem when estimating and using betas, i.e., which statement is FALSE?
Should depreciation expense be explicitly included in the cash budget of a business operation (why or why not)? What are the advantages and disadvantages of using short-term debt as a source of financing? What are exchange rate risks?
Planned sales in the boys’ department for August are $32,000. If the planned stock-sales ratio is 3.5, what should be the stock value on August 1?
A stock has had returns of −19.0 percent, 29.0 percent, 24.0 percent, −10.1 percent, 34.8 percent, and 27.0 percent over the last six years. What are the arithmetic and geometric returns for the stock?
ABC Inc. is ecpected to pay anual dividend of .85$ and 1.25$ and 1.75$ a share over the next three years, respectively. after that, the divdend is expected to increase by 1% anually what is 1 share of stock worth today if similar stocks are yeilding ..
You can put the money in a money market account at your bank and pay off your car loan, or you can invest the money in mutual funds. What factors must you consider in making your decision?
Newtown stock is currently trading at $64 a share. The firm feels that its primary clientele of small retail investors can afford to spend between $3,000 and $3,500 to purchase a round lot of 100 shares. If excess funds are limited, the firm should c..
Using the given information, determine the annual net pretax benefits JMCC would realize by implementing a decentralized collection system.
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