BitBox has raised $12 million in a Series A round with $37 million post-money value and a 1.5x liquidation preference, and $25 million in a Series B round with a $75 million post-money value and a 3x liquidation preference plus seniority over Series A. What will Series A, Series B, and common shareholders receive if BitBox is sold for a. $87 million? b. $102 million? c. $200 million? d. $300 million?

BitBox has raised $12 million in a Series A round with $37 million post-money value and a 1.5x liquidation preference, and $25 million in a Series B round with a $75 million post-money value and a 3x liquidation preference plus seniority over Series A. What will Series A, Series B, and common shareholders receive if BitBox is sold for a. $87 million? b. $102 million? c. $200 million? d. $300 million?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Your company raises a $3m A-round at a $7m pre-$ valuation, with investors receiving a basic liquidation preference. a. How much would the company have to sell for in order for common shareholders to receive a total of $5m? b. How much would the company have to sell for in order for common shareholders to receive a total of $50m?
Problem 3. BitBox has raised $10 million in a Series A round with $40 million post-money value and a 1.5x liquidation preference, and $25 million in a Series B round with a $75 million post-money value and a 3x liquidation preference plus seniority over Series A. What will Series A, Series B, and common shareholders receive if BitBox is sold for [a] $85 million? [b] $100 million? [c] $200 million? [d] $300 million?
On January 2008, your firm raised $10 mill in Series A financing with a 2x liquidation preference, no participation rights, and a $25 post-money valuation. On January 2010, your firm raised $20mill in Series B (less senior) financing with a 1x liquidation preference, no participation rights, and a $40 post-money valuation. What would be the minimum sale price of the firm such that every investor converts? a. 40 b. 100 c. 75 d. 50
Suppose that a bank purchased 15 million shares of Company E. The shares are bid $34.2 and offer $35.4. The mean and standard deviation of the bid-ask spread are 0.034483 and 0.054, respectively. What is the cost of liquidation that we are 99% confident will not be exceeded (i.e., in a stressed market condition)? O 2.402 O 0.259 O 1.201
JJJCorporation is to be sold off by its shareholders. It currently has market values of debt and of equity at $20,000,000 and $25,000,000 respectively. The effective cost of debt is 12% while the cost of equity is 18%. Several analysts determined three potential acquirers who may be able to synergize with JJJ. The following returns from JJJ depending on the acquirer are as follows:" Acquirer Expected Firm Return G 20% H 24% I 18% Based on the above and assuming that liabilities will be retained by the entity, what is the highest selling price that the shareholders can get from the sale of JJJ?
Hassel Inc.'s would like to undertake a policy of paying out 45% of its income. Hassel’s latest net income was P1,250,000, and it had 225,000 shares outstanding. What dividend per share should Hassel declare? * Choices: P2.63 P2.14 P2.38 P2.50 P2.26
Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Firm B Firm T Shares outstanding 4,600 1,000 Price per share $ 40 $ 14 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8,800. If Firm T is willing to be acquired for $16 per share in cash, what is the NPV of the a. merger? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) What will the price per share of the merged firm be assuming the conditions in b. (a)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) If Firm T is willing to be acquired for $16 per share in cash, what is the merger c. premium? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) d. Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers one of its shares for…
Elias Corporation shared the following prospective financial information to a group of private equity investors. You were tasked to compute for the approximate price that should be set if the investor buys out 20% share in Elias Company. 2025 3,500,000 4,000,000 875,000 1,000,000 750,000 2021 2,250,000 562,500 750,000 937,500 450,000 200,000 287,500 2022 2,750,000 687,500 750,000 1,312,500 550,000 200,000 562,500 2023 3,250,000 812,500 750,000 1,687,500 650,000 200,000 837,500 2024 Revenues Variable Cost of Goods Sold Fixed Cost of Goods Sold Gross Profit Variable Operating Expenses Fixed Operating Expenses | Operating Income 750,000 1,875,000 2,250,000 800,000 700,000 200,000 200,000 975,000 1,250,000 Other pertinent information can be found below: • Depreciation of P500,000 is included in fixed cost of goods sold while P100,000 of depreciation is charged to fixed operating expenses. Income tax rate is 20%. • Elias Corporation estimates it will need P200,000 cash on an annual basis to…
Elias Corporation shared the following prospective financial information to a group of private equity investors. You were tasked to compute for the approximate price that should be set if the investor buys out 20% share in Elias Company. 2021 2,250,000 562,500 750,000 937,500 450,000 200,000 287,500 2022 2,750,000 687,500 750,000 1,312,500 550,000 200,000 562,500 2023 3,250,000 812,500 750,000 1,687,500 650,000 200,000 837,500 2025 3,500,000 4,000,000 875,000 1,000,000 750,000 2024 Revenues Variable Cost of Goods Sold Fixed Cost of Goods Sold Gross Profit Variable Operating Expenses Fixed Operating Expenses Operating Income 750,000 1,875,000 2,250,000 800,000 700,000 200,000 200,000 975,000 1,250,000 Other pertinent information can be found below: • Depreciation of P500,000 is included in fixed cost of goods sold while P100,000 of depreciation is charged to fixed operating expenses. • Income tax rate is 20%. • Elias Corporation estimates it will need P200,000 cash on an annual basis to…
Corporation A is deciding on an acquisition. Corporation A would buy all shares of corporation B, for a total of 500,000 shares of B. Currently, corporation B is expected to pay a constant dividend forever of $12 per share. The market price of B shares reflects these expectations, and the required rate of return is 4%. A can buy B shares at their current market price, and management expects to be able to exploit synergies between the two corporations and increase revenues. Thus, according to A’s management, if the acquisition takes place the dividend per share for next year is expected to be $12, but dividends are then expected to grow forever at a rate of 3% per year. The required rate of return on stock B would stay unchanged at 4%. What is the NPV of the acquisition? .
Myers Inc. currently has 5, 750,000 shares outstanding, and they trade at a price of $23.76. They need to raise $35,000,000 in new funding, and will execute a Rights Offering at a subscription price of $18.00 per share. At the current share price, what will be the price of one Right leading up to the subscription? Group of answer choices $3.04 $1.46 $1.74 $22.30 $2.96
The company requires P1,000,000 for its proposed plan. The following financial alternatives are available:● Plan I: 100% Equity Capital (Face Value P100)● Plan II: 50% Equity Capital (Face Value P100) and 50% Debenture (interest rate 6%)● Plan III: 50% Equity Capital (Face Value P100) and 50% Preference Shares (rate of dividend 6%)● Plan IV: 25% Equity Capital (Face Value $100), 25% Debentures (interest rate 6%), and 50% Preference Shares (rate of dividend 6%) The rate of tax applicable to the company is 50%. The company expects an EBIT of P4,000,000. Calculate the indifference point of EBIT between Plan I and Plan III. Plan I: There is no fixed financial charge (debenture interest or preference dividend). Therefore, there is no financial break-even. Plan II: Fixed financial charges amount to P30,000 (interest on debentures). Therefore, the financial break-even is P30,000.Plan III: In the case of Plan III, the fixed financial charge is P30,000 (preference dividend).…

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