7 Question 3. Based on the following scenario answer Parts A, B, and C. In part A you will be required to calculatethe percent ownership that you will need to give to an outside investor group. In part B you will be required tocalculate the total number of shares of stock based on the percent of ownership that you calculated in part A. Inpart C you will be required to calculate the price per share of the stock that will be derived from your answer inparts A & B. Please note that parts B and C will be graded based on the inputs that you derived from the priorparts. If these inputs were incorrect you will still receive full credit for parts B and C if you show me in the belowtext box that you used the correct method to solve the question.Scenario: Company A is projected to have equity cash flow of $10,000,000 in year 3. Similar companies have soldfor 8X their cash flows giving Company A a projected valuation for $80,000,000 in year 3.Part A. Assuming a 1 round funding scenario, if an investor invests $5,000,000 at the beginning of year 1 (time 0)and requires a 20% return on his/her investment, what is the ownership percentage in the firm that theentrepreneur will want to give to the investor if the firm is sold at the projected amount in year 3? Please inputyour answer to two decimal places without the % sign and roundup (for example if answer is 10.56% input as .11)Part B. If there are 1,000,000 shares of stock outstanding before the first round of funding, how many shares ofstock will be given to the investor in the first round of funding? Please input your answer in the xx,xxx format andround up to the nearest whole number.Part C. What is the price per share of the stock in the first round of funding? Please input your answer in the$xx.xx format and round up to the nearest cent

Given data company value at the end of three years =$80,000,000. rate of return= 20% investor…

Part A. Assuming a 1 round funding scenario, if an investor invests $5,000,000 at the beginning of year 1 (time 0) and requires a 20% return on his/her investment, what is the ownership percentage in the firm that the entrepreneur will want to give to the investor if the firm is sold at the projected amount in year 3? Please input your answer to two decimal places without the % sign and roundup (for example if answer is 10.56% input as .11) Part B. If there are 1,000,000 shares of stock outstanding before the first round of funding, how many shares of stock will be given to the investor in the first round of funding? Please input your answer in the xx,xxx format and round up to the nearest whole number. Part C. What is the price per share of the stock in the first round of funding? Please input your answer in the $xx.xx format and round up to the nearest cent

Part A. Assuming a 1 round funding scenario, if an investor invests $5,000,000 at the beginning of year 1 (time 0) and requires a 20% return on his/her investment, what is the ownership percentage in the firm that the entrepreneur will want to give to the investor if the firm is sold at the projected amount in year 3? Please input your answer to two decimal places without the % sign and roundup (for example if answer is 10.56% input as .11) Part B. If there are 1,000,000 shares of stock outstanding before the first round of funding, how many shares of stock will be given to the investor in the first round of funding? Please input your answer in the xx,xxx format and round up to the nearest whole number. Part C. What is the price per share of the stock in the first round of funding? Please input your answer in the $xx.xx format and round up to the nearest cent

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 4AP

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