Find the value of firm

Assignment Help Finance Basics
Reference no: EM1356814

Delta software was founded last year to develop software for gaming applications. The founder initially invested $800,000 and received 8 million shares of stock. Delta now needs to raise a second round of capital and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1 million and wants to own 20% of the company after the investment is completed.

a.How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price-per-share of this funding round?

b.What will the value of the whole firm be after this investment (the post money valuation)?

 

Reference no: EM1356814

Questions Cloud

Decisions to maximize stockholders welfare : Suppose you are the president of a large publicly owned company, would you make decisions to maximize stockholders' welfare or your own personal interest?
Swot analysis of the military : How a person conducts a basic SWOT analysis of an organization or department to which a person belongs to.
What is the boats average speed : The locomotive is moving at 25 km/h. The engineer of the high speed train immediately applies the brakes. What must be the magnitude of the resulting constant deceleration if a collision is to be just avoided.
Did we confirm to the customers specifications : were the schedules realistic and did we confirm to the customers specifications?
Find the value of firm : Delta software was discovered last year to develop software for gaming applications. The founder initially invested $800,000 and received eight million shares of stock.
Medicare tied to life expectancy : Explain what are the advantages and disadvantages of this proposition and what do you think would be appropriate?
What is the magnitude of the force on an electron : How much work must be done on the electron to move it to negative plate if it is initially positioned 2.86 mm from the positive plate.
Explain the most likely unintentional consequence : Explain the most likely unintentional consequence of downsizing and / or layoffs in organizations indicating how an organization may avoid these consequences
Health care administration in the hospital setting : Global Nursing Shortage - Show how is the current global nursing shortage going to impact the future of health care administration in the hospital setting?

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate cost of equity and after-tax cost of debt

Advise the difference between financing and investment policies in working capital management and in every case provide an example to illustrate answer.

  Find the future value of an ordinary annuity

Nick has a revolving section store credit card account with an yearly percentage rate of 15%. Last month's balance on the account was 423.78.

  Individual investor versus a mutual fund

Would these three elements have different priorities if referring to an individual investor versus a mutual fund?

  Computing compound interest and annuity

As a financial planner a customer comes to you for investment advice. After meeting with him and understanding his requirements, you offer him the following two investment options:

  Determine the maturity risk premium

Determine the maturity risk premium on thirty year Treasury bonds? Assume the expected inflation for 3-month T-Bills and 30-year T-Bonds is the same.

  Find percent of the population registered to vote

If during an election there were 6372 listed voters & 3560 listed voters voted, what percentage of the listed voters actually cast a vote.

  Determine traditional cost accounting

Problems encountered because of traditional cost Accounting and how did traditional cost accounting concepts are practices contribute to the problems at the UniCo

  Securing an additional loan

Do you think it is a good idea for a corporations to have liabilities (debt) when running their business? Explain your answer.

  Calculate the effective annual rate of borrowing

Corporation X has a line of credit at Bank A that requires it to pay 11 percent interest on its borrowing and to maintain a compensating balance equal to 15 percent of the amount borrowed.

  Geometric average annual total returns

Describe how and why it differs from the average (mean) period-by-period return to the fund over the 2010-2012 period - evaluate both the arithmetic and geometric average annual total returns for the 2010-12 period?

  Company had no amortization charges also no non-operating

Operating costs other than reduction, also $5,402 of depreciation. Company had no amortization charges also no non- operating income.

  Define financial markets and share experiences

Define financial markets and share experiences you have had with at least one type of financial market or institution. Discuss and explain the main functions that market or institution performs.

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