An A-round investor got 20% of the shares of a startup (2 million shares, in return for a €2 million investment). The venture performed poorly, however, and needs to raise another €1 million at lower valuations. A new B-round investor is willing to invest €1 million in return for 25% of the shares. The A-round investor negotiated a full anti-dilution clause in the A- round contract. After the B-round, investor A will own % of the company? A. 60% B. 50% C. 40% D. 30% E. 20% ——
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- 2. The listed App AG has issued shares with a nominal value of €1. In t5, a capital increase is carried out at a price of €21 per share. App AG receives €10.5 million via bank transfer. How to book in t5? Specific standards are not specified.Bellex Technik AG issues an IPO sold on a best-// basis. The company's investment bank demands a spread of 17 per cent of the offer price, which is set at €30 per share. Three million shares are issued. However, the bank was overly optimistic and eventually is able to sell the shares for only €28. What are the proceeds for the issuer and the underwriter?Dark Creek Corporation's CEO is selecting between two mutually exclusive projects. Thecompany needs to make a $3,500 payment to bondholders at the end of the year. To minimizeagency costs, the firm's bondholders decide to use a bond covenant to stipulate that thebondholders can demand an additional payment if the company chooses to take on the high-volatility project. How much additional payment to bondholders would make stockholdersindifferent between the two projects? Cash flows pertaining to the two projects are shown inthe table below. can you hand write please
- Dark Creek Corporation's CEO is selecting between two mutually exclusive projects. Thecompany needs to make a $3,500 payment to bondholders at the end of the year. To minimizeagency costs, the firm's bondholders decide to use a bond covenant to stipulate that thebondholders can demand an additional payment if the company chooses to take on the high-volatility project. How much additional payment to bondholders would make stockholdersindifferent between the two projects? Cash flows pertaining to the two projects are shown inthe table below.EBV is considering a $6M Series A investment in Newco. EBV proposes to structure the investment as 5M shares of convertible preferred stock. The founder and employees of Newco have claims on 10M shares of common stock. Thus, following the Series A investment, Newco will have 10M common shares outstanding and would have 15M shares outstanding on conversion of the CP. EBV estimates a 30 percent probability for a successful exit, with an expected exit time in 5 years and an exit valuation of $250M. The $100M EBV fund has annual fees of 2 percent for each of its 10 years of life and earns 20 percent carried interest on all profits. Assume the following: The cost of venture capital is 10%; Expected GVM -2.5; expected retention for first round investors is 50%. GP% - 10%. Apply standard assumptions listed in the textbook and lecture notes for additional data and information required for the valuation. What is the proposed ownership today at the time of investment? O 16.65% O33.3% O40.0%An investment bank agrees to underwrite an issue of 15 million shares of stock for Looney Landscaping Corporation. a. The investment bank underwrites the stock on a firm commitment basis, and agrees to pay $10.00 per share to Looney Landscaping Corporation for the 15 million shares of stock. The investment bank then sells those shares to the public for $11.50 per share. How much money does Looney Landscaping Corporation receive? What is the profit to the investment bank? If the investment bank can sell the shares for only $8.50, how much money does Looney Landscaping Corporation receive? What is the profit to the investment bank? b. Suppose, instead, that the investment bank agrees to underwrite the 15 million shares on a best efforts basis. The investment bank is able to sell 13.5 million shares for $10.00 per share, and it charges Looney Landscaping Corporation $0.325 per share sold. How much money does Looney Landscaping Corporation receive? What is the profit to the investment…
- EBV is considering a $5M Series A investment in Newco. EBV proposes to structure the investment as 6M shares of convertible preferred stock. The employees of Newco have claims on 10M shares of common stock. Thus, following the Series A investment, Newco will have 10M common shares outstanding and would have 16M shares outstanding on conversion of the CP. EBV estimates a 25 percent probability for a successful exit, with an expected exit time in 5 years and an exit valuation of $500M. The $100M EBV fund has annual fees of 2 percent for each of its 10 years of life and earns 20 percent carried interest on all profits. What is your investment recommendation for EBV? (Show all works.)(c) Pointer Plc has two investments. One, an investment in listed shares, is available for sale as a financial asset. The current market value is £200,000 but the shares were bought for £500,000. The other is an investment in a three year bond with an amortised cost of £7,000,000 with a stated and effective interest rate of 7% (current market rates are 10%). After two years Pointer Plc is not expecting to receive the last year's interest and expects to receive only 2/3 of the principal. Required i. What is impairment in relation to financial assets measured at amortised cost. How is impairment accounted for? Your answer to this part of the question should not be more than 120 words.Jaja Plc has two investments. One, an investment in listed shares, is available for sale as a financial asset. The current market value is £405,000 but the shares were bought for £675,000. The other is an investment in a three year bond with an amortised cost of £450,000 with a stated and effective interest rate of 7% (current market rates are 10%). After two years Jaja Plc is not expecting to receive the last year’s interest and expects to receive only 2/3 of the principal. Required : What is impairment? What impairment should be recorded in the accounts of Jaja Plc for the listed shares and the three year bond?
- RST Inc. wants to raise $30M in an IPO and chose Soldman Gachs to underwrite the offering. The two sides agreed that Soldman Gachs would sell 5M shares to the public and provide $30M in net proceeds to RST. The out of pocket expenses incurred by Soldman Gachs were $500,000. What profit or loss did Security Brokers incur if the issue were sold to the public at $8 / share? What about at $5.50 / share?On February 2, 2016, an investor held some Province of Ontario stripped coupons in a self-administered RRSP at ScotiaMcLeod, an investment dealer. Each coupon represented a promise to pay $100 at the maturity date on February 2, 2022, but the investor would giving up $76.24 on February 2, 2016, in exchange for $100 to be received just less than six years later. a. Based upon the $76.24 price, what rate was the yield on the Province of Ontario bond? (Do not round intermediate colculations and round your final answer to 2 decimal places.) Rate of return b. Suppose that on February 2, 2017, the security's price was $85.00. If an investor had purchased it for $76.24 a year earlier and sold it on this day, what annual rate of return would she have earned? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Annual rate of return c. If an investor had purchased the security at the market price of $85.00 on February 2, 2017, and held it until it matured,…Amherst Corporation, an investment banking company, often has extra cash to invest. Suppose Amherst buys900 shares of Hurricane Corporation stock at $57 per share, representing less than 5% ofHurricane’s outstanding stock. Amherst expects to hold the Hurricane stock for one month andthen sell it. The purchase occurs on December 15, 2018. On December 31, the market price of ashare of Hurricane stock is $58 per share.Requirements1. What type of investment is this for Amherst? Give the reason for your answer.2. Record Amherst’s purchase of the Hurricane stock on December 15 and the adjustment tomarket value on December 31.3. Show how Amherst would report this investment on its balance sheet at December 31 andany gain or loss on its income statement for the year ended December 31, 2018.