Compute the lp cost for investment, Business Economics

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

Posted Date: 4/3/2013 1:27:44 AM | Location : United States







Related Discussions:- Compute the lp cost for investment, Assignment Help, Ask Question on Compute the lp cost for investment, Get Answer, Expert's Help, Compute the lp cost for investment Discussions

Write discussion on Compute the lp cost for investment
Your posts are moderated
Related Questions
QUESTION 1 (a) What, according to you, are the ergonomic problems associated with the use of visual display units? Describe the measures which can be taken to eliminate these p

What are the external constraints on government action less developed countries? External Constraints on Government Action LDCs face external factors beyond their control are:



Marris'' Model OF MAXIMISING POLICY


what are the abstracting and indexing services in social science?

What would primary markets look like in absence of secondary markets?

Is structural change a problem? Economies are dynamic and adapt to meet evolving consumer wants needs. This means resources are moved from use to use in response to, say, chan

Your project is behind schedule and you are seeing adding extra employees to the team. What would be the potential benefits and drawbacks of this approach? Given that the slipp