What is the new ownership percentage

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Question - Salt & Battery Fish & Chips is valued at $39.340 million (share price $28.10) and needs additional funding of $11.0 million to keep the lights on. Rather than issuing outright equity and immediately diluting the founders, a convertible debt issue is being considered. The debt would not carry any interest but would grant debt holders the right to participate during the following funding round and receive a 21.0 percent discount on the share price determined at that time.

A) If the share price in the next round were to be set at $40.80, bond holders would be able to buy shares for $? and at most? shares would be issued to owners of the convertible issue.

What is the new ownership percentage of the existing shareholders in this case?

B) If the share price in the next round were to be set at $21.70, bondholders would be able to buy shares for $? and at most ? shares would be issued to owners of the convertible issue.

What is the new ownership percentage of the existing shareholders in this case?

Reference no: EM132765400

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