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. Shares b. Percentage of shares owned

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
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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 $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
Transcribed Image Text: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
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