Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. how much equity should we negotiate for a $20m inv

How much equity should we negotiate for a $20m investment if we expect to wait...

50.1K

Verified Solution

Question

Finance

How much equity should we negotiate for a $20m investment if we expect to wait 5 years for an exit that will be priced at 7 times EBITDA for a company that has a 25% chance of generating 100M in EBITDA (otherwise it will be worthless) if investors require an 15% return? Assume that our current equity stake will be diluted in half by the time an exit occurs. 11.5% ownership

23% ownership

46% ownership

None of the above

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Find the geometric mean of 8 and 18 Write your answer in simplest radical form

Geometry
Q

A mixture of benzene (C6H6), toluene (CH3C6H5) and methane (CH4) was injected into a gas chromatograph...

Chemistry
Q

You are participating in an activity which involves running from Baltimore City Community College campus...

Biology
Q

Solve for y, where y is a real number.3?y=-3

Basic Math
Q

1 6 10 Functions and Their Graphs Determine whether the graph is a function If...

Calculus
Q

Question 10 6 points It is allergy season When an average adult takes a allergy...

Calculus
Q

A 15-year convertible bond with a coupon rate 6% can be converted into 20 shares...

Accounting
Q

Terri Ronsin had recently been transferred to the Home Security Systems Division of National Home...

Accounting
Q

The following information applies to the questions displayed below.] Wallys Widget...

Accounting
Q

4.Managers of Port Moody BBQ & Grill have budgeted to achieve a $35,000 annual profit...

Accounting
Q

Exercise 11-16 (Part Level Submission) Presented below is information related to equipment owned by Flint...

Accounting
Q

The accounting principle that requires revenue to be recorded when goods or services are provided...

Accounting