What share of the company would sbi caps require

Assignment Help Finance Basics
Reference no: EM132572705

The CEO of Millennium Dairy Product, a small venture among 10 partners each having 100,000 shares, sought to raise an additional Rs.50 million in a private placement of equity in his early stage dairy product company. The CEO conservatively projected net income of Rs.50 million in year 5, and knew that the comparable companies traded at a price earnings ratio of 20X. She approached SBI caps, a venture capitalist with her proposal to seek funds.

a) What share of the company would SBI caps require today if their required rate of return was 50%?

b) If the company had 1000,000 shares outstanding before the private placement, how many shares should SBI caps purchase?

c) What price per share should she agree to pay if her required return was 50%?

d) What are the pre money and post valuations?

e) What are the Carried interests of the VC and the promoters?

Reference no: EM132572705

Questions Cloud

Compute the net present value-lupace corporation : a. Compute the Net Present Value of this project.
Measure financial situation : Please find a company that you interest and measure its financial situation by using the Z-score.
What is tom effective annual rate : Tom purchased 100 shares of Dalia Co. stock at a price of $123.09 four months ago. He sold all stocks today for $123.16.
How much money anna need to put a side : Anna wants to save $22,000 in 3 years time by putting a little money a side for each month in her saving accounts
What share of the company would sbi caps require : What share of the company would SBI caps require today if their required rate of return was 50%?
Find the value of the project : Acme is considering a new project that requires an investment of $100 million in machinery. This is expected to produce earnings
Percentage for euro per pound sterling : Calculate the bid-ask spread percentage for euro per pound sterling.
What is the effective annual rate : What is the effective annual rate of interest of interest is compounded annually?
Machine should long memorial hospital choose : Using 8% discount rate on its investments, which machine should Long Memorial Hospital choose?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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