You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $150,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $1.20 each. a. How many shares will you need to sell to raise the additional $1,692,000? Note: Enter your answer in whole numbers, not in millions. b. What fraction of the firm will you own after the VC investment? Note: Enter your answer as a percent rounded to 1 decimal place. Answer is not complete. a. Shares b. Percentage of shares owned 43.7 %

You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $150,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $1.20 each. a. How many shares will you need to sell to raise the additional $1,692,000? Note: Enter your answer in whole numbers, not in millions. b. What fraction of the firm will you own after the VC investment? Note: Enter your answer as a percent rounded to 1 decimal place. Answer is not complete. a. Shares b. Percentage of shares owned 43.7 %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $100,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.40 each. How many shares will you need to sell to raise the additional $500,000? Note: Enter your answer in whole numbers, not in millions. What fraction of the firm will you own
You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $130,000 plus the idea for your new product Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.55 each. a. How many shares will you need to sell to raise the additional $704,000? Note: Enter your answer in whole numbers, not in millions. b. What fraction of the firm will you own after the VC investment? Note: Enter your answer as a percent rounded to 1 decimal place. a Shares b. Percentage of shares owned
You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $120,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $1.05 each. a. How many shares will you need to sell to raise the additional $1,449,000? (Enter your answer in whole numbers, not in millions.) Shares b. What fraction of the firm will you own after the VC investment? (Enter your answer as a percent rounded to 1 decimal place.) Percentage of shares owned %
You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company's assets are $120,000 plus the idea for your new product. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $0.50 each. How many shares will you need to sell to raise the additional $635,000? Note: Enter your answer in whole numbers, not in millions. What fraction of the firm will you own after the VC investment? Note: Enter your answer as a percent rounded to 1 decimal place.
The company has offered you a $5,000 bonus, which you may receive today, or 100 shares of the company's stock, which has a current stock price of $50 per share. Mathematically, what is the best choice? In terms of Excel. Why?
You purchase 1,000 shares of WMT (Walmart) for $143 per share. A year later, you sell the stock for $166 per share. You receive a dividend of $2.27 a share. a.What is your total dollar return? b. What are your dividend yield, capital gain yield, and total percentage return? Note: don't use chat gpt.
Farah’s Fine Fashions (FFF) is considering raising money through a rights offering. FFF currently has 10 million shares outstanding selling for $22 per share. Current shareholders will receive one right per share. Four rights are required to buy one share for $20. Will the rights be exercised and if so, how much money will FFF raise if all rights are exercised? Select one: a. The rights will not be exercised. b. $4 million c. $40 million d. $50 million e. None of the above.
You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.56 million shares. The VC offers $1.03 million for 820,000 new shares. b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?
You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.96 million shares. The VC offers $1.12 million for 820,000 new shares. a. What is the implied price per share? b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?
You Invest $3000 by buying 100 shares of Driss Inc at a price of $30 per share. One year from now, Driss pays you a dividend of 40 cents per share. One year later (i.e. two years from now), you get another dividend of 40 cents per share and you immediately sell your shares for $32 each. What return (IRR) did you get on your investment? (Do not round intermediate calculations. Report your result as a percentage. Round the final answers to 2 decimal places. Be careful - Excel's default is to report whole precentage points. Omit the % sign in your response. For example, if your answer is 3.21%, just enter 3.21)
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The company has offered you a $5,000 bonus, which you may receive today, or 100 shares of the company’s stock, which has a current stock price of $50 per share. Mathematically, what is the best choice? Why?

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