Question: 10. Text Exercises 14.1 Use VCV tools and submit the printout. In the diagram show the values of x-axis and y-axis for all inflection points.
10. Text Exercises 14.1 Use VCV tools and submit the printout. In the diagram show the values of x-axis and y-axis for all inflection points. 14.1 Suppose EBV is considering a $5M Series A investment in Newco. EBV proposes to structure the investment as RP with APP of $4M plus 5M shares of common stock. (We refer to this basket of RP plus common as "Series A") The employees of Newco have claims on 15M shares of common stock. Following the Series A investment, Newco will have 20M common shares outstanding (a) Compute the LP cost for this inyestment (b) Solve for the LP valuation equation for this investment, ie. write the exit equation. (c) Suppose that total valuation is $30M. What is the LP valuation? (Use VCVtools) (d) Find the breakeven valuation for the investment under base case assumptions. (Use VCVtools)
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