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Business, 17.12.2019 04:31 saabrrinnaaa

Aventure capital firm wants to invest $5 million in rosita corp., a startup biotechnology firm. rosita is expected to go public in 5 years. earnings will be negligible until year 5, but are projected to be $8 million in year 5. comparable biotech firms are trading at p/e ratios of 15 on average. rosita has 500,000 shares of stock outstanding. the vc firm will apply a discount rate of 50% to the investment. how many shares of stock should the vc firm be given for its $5 million investment? what should be the price per share? what are the implied pre-money and post-money valuations?

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Aventure capital firm wants to invest $5 million in rosita corp., a startup biotechnology firm. rosi...
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