Ginny is actively pursuing another business venture as a ticket scalper. She estimates that for a $2
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Question:
Ginny is actively pursuing another business venture as a ticket scalper. She estimates that for a $2 million investment in inventory she can resell her tickets for $6 million over the next two years (cash flows realized in exactly two years). Assume the same 6% interest rate.
(i) What is the NPV of the Ticket Brokering venture?
(ii) What is the new value of Ginny's Corporation?
(iii) Suppose Ginny does not have the $2million to start the new venture. Instead, she wants to raise equity capital by issuing 100,000 shares. What price will new investors be willing to pay?
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
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