What is the first offer post-money valuation of the firm

Assignment Help Financial Management
Reference no: EM131346131

Your start-up company needs capital. Right now, you own

100 % 100%

of the firm with

9.99.9

million shares. You have received two offers from venture capitalists. The first offers to invest

$ 3.02$3.02

million for

1.171.17

million new shares. The second offers  

$ 2.03$2.03

million for

461 comma 000461,000

new shares.

a. What is the first offer's post-money valuation of the firm?

b. What is the second offer's post-money valuation of the firm?

c. What is the difference in the percentage dilution caused by each offer?

d. What is the dilution per dollar invested for each offer?

Reference no: EM131346131

Questions Cloud

What would the price be if the P-E ratio increased : New York Times Co. (NYT) recently earned a profit of $3.21 per share and has a P/E ratio of 19.45. The dividend has been growing at a 6.50 percent rate over the past six years. If this growth rate continues, what would be the stock price in five year..
The discounted value of the stock split : ABC Corporation recently announced its plans to pay a 5 percent stock dividend in addition to its scheduled $0.32 quarterly dividend, which has been paid on its common stock in all of the previous 13 quarters. The ex-dividend date will be one month a..
What weights should MV Corporation use in its WACC : What weights should MV Corporation use in its WACC?
Effective annual return-what is its after-tax cost of debt : Avicorp has a $ 14.6, $14.6 million debt issue outstanding, with a 5.9 %, 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in six? months, and the debt matures in five years. It is currently priced at 93 %, 93% of par value...
What is the first offer post-money valuation of the firm : What is the first offer's post-money valuation of the firm? What is the second offer's post-money valuation of the firm? What is the difference in the percentage dilution caused by each offer?
Parenthesis divided by current liabilities : Your firm successfully issued new debt last? year, but the debt carries covenants.? Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick? (acid-test) ratio left parenthesis Current A..
What is the null hypothesis and alternative hypothesis : CASH COW, an investment firm, has made a list of which companies that they believed were the top 100 highest earning stocks. The mean growth of all of the companies follows a normal distribution with a mean increase of 6.62 points with a standard dev..
Excel problem-calculate net present value of each project : Excel Problem-XYZ Co. has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows. Calculate the Net Present Value of each project. If XYZ's WACC is 18%, what is the NPV and IRR of eac..
Explain the implications of an unlevered firm : Contrast (provide brief example) and explain the implications of an unlevered firm with that of a levered firm on Net Income and the corresponding risks associated with each approach.

Reviews

Write a Review

Financial Management Questions & Answers

  The bonds make semi annual payments

Grohl Co. issued 6-year bonds a year ago at a coupon rate of 10 percent. The bonds make semi annual payments. If the YTM on these bonds is 11 percent, what is the current bond price?

  Should dickson city introduce the policy of credit sales

Dickson City Company has annual sales of $5 million, while the cost of goods sold is $3.2 million. All sales are made on a cash basis. The owner of Dickson has come up with the plan of giving credit to the customers. Should Dickson City introduce the..

  About the valuation

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 3% and the market risk premium is 4%. Van Buren currently expects to pay a year-end dividend of $1.65 a share (D1 = $1.65). Van Buren..

  Capital budget lists the projects and investments

A capital budget lists the projects and investments that a company plans to undertake during the coming year. When sales of a new product displace sales of an existing product, the situation is often referred to as cannibalization. Because value is l..

  Examining balance sheets

You are examining balance sheets for 2012 and 2013 and you observe that a company's net fixed assets increased from $45 million to $50 million. The income staement states that depreciation was $2 million. If it's the case that the company purchased a..

  Fixed asset is fully depreciated over life of the project

A five-year project has an initial fixed asset investment of $290,000, an initial NWC investment of $26,000, and an annual OCF of −$25,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required re..

  What are the effects on cash flow

A project currently generates sales of $7 million, variable costs equal 60% of sales, and fixed costs are $1.4 million. The firm’s tax rate is 40%. Assume all sales and expenses are cash items. What are the effects on cash flow, if sales increase fro..

  How much wealth per share has been created

A new factory at Arcataa requires an initial outlay of $1 Million. Of this $1 Million, $400,000 Must be paid immediately and $200,000 will be paid at the end of each year for the next 3 years. Assume cash flows occure at year-end. At a 10 percent req..

  What is the financial break-even point for the project

L.J.’s Toys Inc. just purchased a $365,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its five-year economic life. Each toy sells for $25. The variable cost per toy is $11, and the firm incurs ..

  Pays interest annually yields a rate of return

A bond that pays interest annually yields a rate of return of 6.00 percent. The inflation rate for the same period is 2 percent. What is the real rate of return on this bond?

  What is the break-even level of earnings before interest

Kelso Electric is debating between a leveraged and an unleveraged capital structure. The all equity capital structure would consist of 26,000 shares of stock. The debt and equity option would consist of 15,000 shares of stock plus $250,000 of debt wi..

  What is the price of the stock expected

Maritza has one share of stock and one bond. The total value of the two securities is 1,138 dollars. The bond has a YTM of 12.04 percent, a coupon rate of 11.46 percent, and a face value of 1,000 dollars; The expected return for the stock is 14.01 pe..

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