What share of the company will reinhardt capital

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Question 1: Jonas sought to raise $4 million in private placement of equity in his early stage Pet Supply Internet Company, Fur Foods and Finery.com. He projected net income of $12.5 million in year 5 for Fur Foods and Finery and knew that comparable companies traded at a price range of 9 times earnings (i.e. multiple of 9). He approached Dan Reinhardt of Reinhardt Capital about an investment. After a brief due diligence Dan developed an offer sheet agreeing with the $12.5 million earning projection and the 9 multiple. If the deal between Reinhardt Capital and Fur Food and Finery.com closes, what share of the company will Reinhardt Capital be acquiring if Dan Reinhardt's required rate of return (RRR) is 50%.

Question 2: Jonas is the sole owner of Fur Foods and Finery.com and has 1,200,000 shares of stock. Continuing with Question 3, how many shares of stock will Reinhardt Capital receive for the $4 million investment.

Reference no: EM132459179

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