Chapter 7 Solutions e.edu

Problem # 9. Do the problem with a firm value target of $100 million (collecting the $20 million from the equity sale and not the venture capitalist) Market target price is $10 for the auction. But this is 20% underpriced to get individuals to buy the stock. The “value” is really $10/ (1-0.20) = $12.50 per share. ................
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