This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Rosita has 500,000 shares of stock outstanding. The VC firm will apply a discount rate of 50% to the investment. How many shares of stock should the VC firm be given for its $5 million investment? What should be the price per share? What are the implied pre-money and post-money valuations? 2. Do Higgins, Chapter 9, #10. 3. Magenta Corp. wants to raise $50 million in a seasoned equity offering, net of all fees. Magenta stock currently sells for $10 per share. The underwriters will require a fee of $0.50 per share, and indicate that the issue must be underpriced by 5%. In addition to the underwriters fee, the firm will incur $1,000,000 in legal, administrative, and other costs. How many shares must Magenta sell? 4. Do Higgins, Chapter 5, #5. 2...
View Full Document
This note was uploaded on 02/22/2012 for the course BUS M 401 taught by Professor Toddmitton during the Winter '10 term at BYU.
- Winter '10
- Financial Markets