Question: Place a value (price) on company using First Chicago Method of valuation Success Survival SidewayslFailure 1. Revenue Growth rate (from base of S 55% 25%
Success Survival SidewayslFailure 1. Revenue Growth rate (from base of S 55% 25% 15% 6 5.00 million) 2. Revenue level after 3 years, in the Failure scenario, the venture gets 6,100,000 liquidated due to failire 3. Revenue level after 5 years- IPO exit in the Success scenario 4. Revenue level after 7 years for the last survival scenario 5. After-tax profit margin and earnings at 60% 15% NA 10 iquidity 6. Price-eamings ratio at liquidity 7. Value of company at liquidity 8. Present value of company using 35 NA 12 |discount rate of 35% 9. Probability of each scenario 10. Expeted present value of the company 13 0.35 0.45 0.2 14 15 under each separate scenario 11. Expected present value of the 16 company 12. Percentage ownership required in 17 order to invest $4.00 million 19 20 21 23 IA-4. First Chicago Method Ready ? ?e@ Success Survival SidewayslFailure 1. Revenue Growth rate (from base of S 55% 25% 15% 6 5.00 million) 2. Revenue level after 3 years, in the Failure scenario, the venture gets 6,100,000 liquidated due to failire 3. Revenue level after 5 years- IPO exit in the Success scenario 4. Revenue level after 7 years for the last survival scenario 5. After-tax profit margin and earnings at 60% 15% NA 10 iquidity 6. Price-eamings ratio at liquidity 7. Value of company at liquidity 8. Present value of company using 35 NA 12 |discount rate of 35% 9. Probability of each scenario 10. Expeted present value of the company 13 0.35 0.45 0.2 14 15 under each separate scenario 11. Expected present value of the 16 company 12. Percentage ownership required in 17 order to invest $4.00 million 19 20 21 23 IA-4. First Chicago Method Ready ? ?e@
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