Question

The entrepreneur invested $1000 a year ago at $1 per share. An VC investor has now...

The entrepreneur invested $1000 a year ago at $1 per share. An VC investor has now invested $5000 in exchange for 2000 preferred shares. The preferred shares have full-ratchet anti-dilution protection. What can you say about the value per share of the entrepreneur's shares after the VC round?

Homework Answers

Answer #1

Number of shars received by Entrpreneur = $1000/$1 = 1000 shares

Total Shares after VC's Investment = 1000+2000 = 3000 shares

Value of Company after VC's Investment = $1000+$5000 = $6000

Value PER SHARE after VC's Investment = $6000/3000 shares = $2 per share

Therefore, Entrepreneur's Share after VC's Investment = 1000 shares @ $2 per share = $2000

Note: Preference Shares, Full-Rachet Anti-Dilution Protection, is IRRELEVANT at the time of VC's Investment. It will give advantage to VC, when further new shares are issued.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An entrepreneur has 2000 shares. An angel invested $1000 for 1000 shares. A new investor would...
An entrepreneur has 2000 shares. An angel invested $1000 for 1000 shares. A new investor would have been willing to invest $500 for 1000 shares if there were no ratchet in the first round (a price of $0.50) per share. So the total value of the venture is $2000 and the new investor would own 25% of the value. At what price per share would the new investor be willing to invest if the first-round investor has a full ratchet?...
Previously, an entrepreneur invested $1000 for 10,000 shares. An angel investor how has invested $2000 for...
Previously, an entrepreneur invested $1000 for 10,000 shares. An angel investor how has invested $2000 for 5000 shares. Is this an up-round or a down-round? A. An up-round B. A down-round C. There is not enough information to determine this.
An investor purchased a "BBB" stock several weeks ago at $30 per share. the price now...
An investor purchased a "BBB" stock several weeks ago at $30 per share. the price now is $50. If the investor wishes to protect a gain of about $10 a share, what order will the investor place? - market order at $60 - limit order at $50 - stop loss order at $40 - buy a call options contract with stike at $45
A year​ ago, an investor bought 400 shares of a mutual fund at ​$8.51 per share....
A year​ ago, an investor bought 400 shares of a mutual fund at ​$8.51 per share. Over the past​ year, the fund has paid dividends of ​$0.83 per share and had a capital gains distribution of ​$0.69 per share. a. Find the​ investor's holding period​ return, given that this​ no-load fund now has a net asset value of ​$9.28. b. Find the holding period​ return, assuming all the dividends and capital gains distributions are reinvested into additional shares of the...
A year​ ago, an investor bought 600 shares of a mutual fund at ​$8.56 per share....
A year​ ago, an investor bought 600 shares of a mutual fund at ​$8.56 per share. Over the past​ year, the fund has paid dividends of ​$0.89 per share and had a capital gains distribution of ​$0.65 per share. a. Find the​ investor's holding period​ return, given that this​ no-load fund now has a net asset value of ​$9.11. ( answer in % and 2 decimal places) b. Find the holding period​ return, assuming all the dividends and capital gains...
1. Currently, the XYZ firm has a share price of $20. Next year, the firm is...
1. Currently, the XYZ firm has a share price of $20. Next year, the firm is expected to pay a $1 dividend per share. After that, the dividends will grow at 4 percent per year. What is an estimate of the firm’s cost of equity? The firm also has preferred stock outstanding that pays a $2 per share fixed dividend. If this stock is currently priced at $28, what is firm’s cost of preferred stock? The company has an existing...
1.The future value of 3500 dollars invested at 4.5% per year compounded quarterly for six years...
1.The future value of 3500 dollars invested at 4.5% per year compounded quarterly for six years is         ?          dollars. Answer is whole number of dollars, no $ sign. 2. The future value of 810 dollars invested at 5.2% per year compounded monthly for twenty years is     ?         dollars. Answer is whole number of dollars, no $ sign. 3. How much do you need to invest at 3.1% per year compounded continuously for nine years to have 5000 dollars at the...
**PLEASE ANSWER B** Omega Corporation has 11.7 million shares outstanding, now trading at $48 per share....
**PLEASE ANSWER B** Omega Corporation has 11.7 million shares outstanding, now trading at $48 per share. The firm has estimated the expected rate of return to shareholders at about 10%. It has also issued long-term bonds at an interest rate of 9% and has a debt value of $165 million. It pays tax at a marginal rate of 21%. a. What is Omega’s after-tax WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal...
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...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of external and internal analysis, business and corporate strategy, and corporate governance, please discuss the following questions: 1. What is the corporate strategy behind the merger of Xerox and Fujifilm? 2. Why did Xerox agree to the merger? Is this a good deal for Xerox? Discuss the benefits and challenges they face with the merger. 3. Why did Fujifilm agree to the merger? Discuss the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Consider insertsort. Suppose that the input array A has 1% probability to be monotonically decreasing. Show...
    asked 8 minutes ago
  • Your company is thinking of introducing a Bring Your Own Device (BYOD) policy. You have been...
    asked 15 minutes ago
  • Attached is the file GeometricObject.java. Include this in your project, but do not change. Create a...
    asked 17 minutes ago
  • Suppose the number of cars in a household has a binomial distribution with parameters n =...
    asked 20 minutes ago
  • HR needs some information on the new interns put into a database. Given an id, email,...
    asked 41 minutes ago
  • Problem solving strategies Questions years = input("Enter a number of years and I'll tell you how...
    asked 45 minutes ago
  • Calculate ?Hrxn for the following reaction: CH4(g)+4Cl2(g)?CCl4(g)+4HCl(g) Use the following reactions and given ?H?s. C(s)+2H2(g)?CH4(g)?H=?74.6kJC(s)+2Cl2(g)?CCl4(g)?H=?95.7kJH2(g)+Cl2(g)?2HCl(g)?H=?184.6kJ Express...
    asked 52 minutes ago
  • ASCII (American Standard Code for Information Interchange) has an encoding for every character of the alphabet,...
    asked 1 hour ago
  • Is home confinement with electronic monitoring a deterrent? Are there negatives to being confined to one’s...
    asked 1 hour ago
  • Social hostility can have severe lasting effects of interperpersonal relationship during our adolescence years, which if...
    asked 1 hour ago
  • - A series RLC circuit has R=15 ?, L=1.5 H, and C=15 ?F. (a) For what...
    asked 1 hour ago
  • TV Circuit has 30 large-screen televisions in a warehouse in Erie and 60 large-screen televisions in...
    asked 1 hour ago