Compute the lp cost for investment, Business Economics

Assignment Help:

Suppose that EBV is considering a $5m Series A investment in Newco. EBV proposes to structure the investment as 5m shares of CP with FV of $5m, one-to-one conversion to common, and no dividends. EBV estimates the total valuation of Newco as $30m. The founders of Newco, who will continue with the firm, currently hold 15m shares of common stock. Thus following the Series A investment, Newco will have 15m common shares outstanding, with another 5m shares upon conversion of the Series A. EBV has lifetime fees of 25% and carried interest of 20%.

a)  Compute the LP cost for this investment

b)  Compute the partial valuation of this investment

c)  Divide this partial valuation into its two components: GP valuation and LP valuation

d)  Should EBV make this investment?

e)  Perform a sensitivity analysis of this investment recommendation


Related Discussions:- Compute the lp cost for investment

Are patterns of trade a problem, Are patterns of trade a problem? Gene...

Are patterns of trade a problem? Generalising Less Developed Countries have a comparative advantage into primary products and employment intensive manufacturing; Developed Cou

Marginal utility and consumer behaviour, how can a community having water ...

how can a community having water shortages issues be resolved using marginal utility and consumer behaviour

Agriculture economics, A1. Given the following production function Level of...

A1. Given the following production function Level of fertilizer Level of maize 0 0 1 44.9 2 83.6 3 110.1 4 127.3 5 136.9 6 139.9 7 137.1 8 129.2 a) Calculate the APP, MPP and elas

How does culture influence the development process, How does culture influe...

How does culture influence the development process? Culture influences what is of value into a society and affects how individuals, communities and organisations react to modi

Samantha Hill, Problem-solving question: Use the following data for a firm’...

Problem-solving question: Use the following data for a firm’s output at various levels of employment (L) to calculate: a) its marginal physical product of labor (MPPL) schedule; (

Gross domestic production, Explain the statement "during the second quarter...

Explain the statement "during the second quarter of 2010 Irish gross domestic product fell by 1.2%. According to given statement Ireland's gross domestic production fell down i

Differentiate between returns to factor and returns to scale, QUESTION ...

QUESTION a) Differentiate between returns to factor and returns to scale. b) In the long-run the Average Cost Curve is u-shaped. Discuss c) Whenever a firm is making loss

Average amount of debt families, The average amount of debt families have i...

The average amount of debt families have is 2.5 times their annual income with a standard deviation 0.75 times their annual income. How much debt does a family have to have (relati

Homework help in explination, with a water park going in town. What kind of...

with a water park going in town. What kind of externality is this?

What is unbalanced growth theory, What is Unbalanced Growth theory? Un...

What is Unbalanced Growth theory? Unbalanced growth shares analysis along with balanced growth theorists which free markets cannot produce development. Planning of government

Write Your Message!

Captcha
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