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Unformatted text preview: 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? Pre-money valuation = $10.625 million Post-money valuation = 2. Do Higgins, Chapter 9, #10. Pre-money value = Post-money value = $25 million. 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? 5.67 million shares. 4. Do Higgins, Chapter 5, #5 Answers provided in the back of the book....
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- Winter '10
- Financial Markets