Question

2. An investor wishes to take a small ownership stake in a privately owned firm. The...

2. An investor wishes to take a small ownership stake in a privately owned firm. The business as a going concern is estimated to have a total value of $10 million. The investor believes that the appropriate control premium and liquidity discount for a business of this type are 15% and 20%, respectively. What is the maximum amount the investor should pay for a 15% interest in the firm? 10 points
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

In case of any doubt please comment below.

Thank you. Please upvote it.......

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Firm Yahoo has attracted the attention of Firm Verizon because of its poor operating performance. Firm...
Firm Yahoo has attracted the attention of Firm Verizon because of its poor operating performance. Firm Verizon believes that the way Firm Yahoo is managed is inefficient and that replacing the current management team would increase the cash flow of Yahoo by $25,000 every year up to perpetuity. Firm Yahoo has 50,000 shares outstanding and is not listed. Firm Verizon has 250,000 shares outstanding that are currently trading at $40/share. Firm Verizon already owns a 1% stake in Firm Yahoo....
Kim Distribution Services (KDS) distributes food purchased in bulk to small retailers. The firm is divided...
Kim Distribution Services (KDS) distributes food purchased in bulk to small retailers. The firm is divided into two divisions: Purchasing and Distribution. Purchasing is responsible for ordering goods from the manufacturer, receiving them, and then moving them to the appropriate location in the warehouse. Distribution is responsible for taking orders from retailers, picking the products from the warehouse for the orders, and packaging the orders for shipment. KDS has a policy of filling every order on the day of the...
Ignore additional perspectives of the proposal on signalling effects, voting rights, difficulties to take over corporate...
Ignore additional perspectives of the proposal on signalling effects, voting rights, difficulties to take over corporate control, and others. If the costs involving in the process of the takeover deal (e.g. transaction costs) are estimated as 1.5 mil $, what is the maximum price CVF should offer to buy MB Incorporation? Do you think Genghis Smith should/could pursue this proposal? Pursuing Myron Bronco: Wouldn’t it be good?: It was right at the beginning of 2019. Myron Bronco Incorporation (MB) was...
Ben and Chris combined their love of hockey with a business venture. They purchased a small...
Ben and Chris combined their love of hockey with a business venture. They purchased a small portable cart and began selling hockey memorabilia outside of the hometown hockey arena. Their first year went well, but this past year has been a real struggle. Due to poor economic conditions including a loss of jobs, ticket sales at the arena are down, which has significantly hurt their sales as well. As a recent business school graduate, you explain to Ben and Chris:...
1. You have been hired by the Board of Directors of firm XYZ as a part...
1. You have been hired by the Board of Directors of firm XYZ as a part of a team, tasked with the valuation of a potential acquisition target. You have collected the following publicly available information about the target company: • The common stock of the company is currently selling for an average of $40 per share. There are 6.5 million shares outstanding. The annual dividend that the company just paid was $2.60 per share. • The company has two...
Algonquin Outfitters Background You are an Analyst for the professional service firm, BUSI 1043 LLP. Your...
Algonquin Outfitters Background You are an Analyst for the professional service firm, BUSI 1043 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. Since you enjoyed your time in Muskoka compiling the Financial Statements for Henrietta’s Pine Bakery, the Senior Manager from your previous engagement gave you another northern Ontario client, Algonquin Outfitters. Additional Information Algonquin Outfitters follows the Accounting Standards for Private Enterprises. Despite its revenues, AO operates with few administrative staff,...
Homeplate Lexi Taylor looked out the window of her Rexburg apartment and marveled at how her...
Homeplate Lexi Taylor looked out the window of her Rexburg apartment and marveled at how her life had changed in the past few months. Since launching Homeplate a little over a year ago, she had grown from a one-person operation preparing meals in the local YMCA kitchen to a fast growing meal preparation and delivery service, with nearly 3,000 regular customers and strong growth and profit potential. Lexi had gone through raising a seed round of capital and was now...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
Please answer all 9 questions with explanation. Thank you On May 8, 1984, Hannah Eisenstat graduated...
Please answer all 9 questions with explanation. Thank you On May 8, 1984, Hannah Eisenstat graduated from Louisiana State University. She set to work opening a coffee shop in Baton Rouge called HannaH and found a perfect location in a new development. Using a $50,000 inheritance to finance the venture together with her own sweat equity, she started the business on August 1, 1984 as a sole proprietorship. The shop was profitable in the first year. Hannah found, however, that...
Unfortunately it’s a familiar chain of events in the mining industry: junior mining partner makes a...
Unfortunately it’s a familiar chain of events in the mining industry: junior mining partner makes a discovery in a faraway land. Junior mining company sinkssignificant amounts of capital into the ground to establish a world-class resource. The discovery attracts the interest of powerful local business concerns and/or governments. The deposit is seized under suspicious circumstances and the junior mining company’s shareholders are annihilated. This story has played out all over the world from Venezuela to Mongolia to the Democratic Republic...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT