3 14. Using the following information, please answer the questions about Surelock Homes, a startup company. In your analysis, assume thevaluation date is the end of year 6, projected earnings in year 6 will be $12 million, and an appropriate price-to-earnings ratio for valuingthese earnings is 20 times.Year Required ReturnITIE$6812Financing Round Amount in millions1232460%40%30%In addition, the company wants to reserve 15 percent of the shares outstanding at time 6 for employee bonuses and options.a. What percentage ownership at time 0 should round 1 investors demand for their $6 million investment?b. If Surelock presently has 1 million shares outstanding, how many shares should round 1 investors demand at time 0?c. What is the implied price per share of Surelock stock at time 0?d. What is Surelock's pre-money value at time 0? What is its post-money value?page 384

Answer - Solving First three Subparts. The implied value per share is the value of the company that…

Answered: 14. Using the following information,…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter21: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 10SP

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