Given the following information, and using the VC method of valuation, determine the % of the company
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Question:
Given the following information, and using the VC method of valuation, determine the % of the company that needs to be given up for $1.5 m investment.
Required ROR by investor(s): 25%
Net income in five years: $ 3.2 m
Expected P/E ratio in four years: 12 times
Apply the fundamental method of valuation to the following data in order to find a market value (price) for the venture. Part B. What portion of the company should be given up if there is a need for $1.6 m in venture capital?
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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