What percentage ownership of import export company give

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Question - A company investor wants to invest $2.5 million in the Company Export Import that you have which has been in operation for the past seven months. You do not expect to make a profit until the 5th year, and when your net income is expected to $5,000,000. For Common Stock, Export-Import where comparable companies are currently it is traded on the free market at $50 per share. Net profit export-import last year was $500,000 and the company has 200,000 shares of common stock circulated.

Required -

1. What percentage ownership of your Import Export Company business should you give to a VC firm for a $2.5 million investment?

2. Based on question C, give your analysis whether the company should continue cooperation with these investors or you will choose another investment source for example by borrowing from the bank. Give your analysis, opinion and reasons.

Reference no: EM133043677

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