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Pak Budi has the opportunity to buy equity from a company of Rp $ 3,000,000.
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Pak Budi has the opportunity to buy equity from a company of Rp $

3,000,000. Mr. Budi has $ 1,500,000 to invest and a company investor who is willing to invest $ 1,500,000 with an expectation rate of 25% per annum. Mr. Budi should assume the additional $ 5,000,000 as a 5-year bank loan with interest of 12% per annum. This means an initial company value of $ 7,000,000 consisting of $ 4,000,000 and long-term bank loans
Equity capital of $ 3,000,000. The firm's estimation method assumption and the multiples EBITDA or relative valuation model suggest a firm's exit value of $ 12,000,000 based on EBITDA $ 2,000,000 times 6.


a .How much ownership of the capital will Pak Budi give up the expected 25% annual rate to investors?
b . If the agreement is made according to Pak Budi's projection, what is the compound rate of return each year that Pak Budi will get over a period of 5 years?
c . Draw a Venture Valuation Pie that shows the company's current and future value and proportion of its equity holdings.

Step-by-step answer


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Venture valuation pie.PNG

Venture valuation pie.PNG
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