1. Is CAPM a pre-tax or an after-tax method for a private company? (3p) Explain
2.
| 13. In 2018, You and your friend from college started a private company. At that time, You decided to keep 7,500 shares and your friend to have 2,500 shares. | (5p) | |||||||||||||||||||
| After one year and half, your sister decided to invest $20,000 for 40% equity stake in your business. | ||||||||||||||||||||
| In November 2020, all shareholders decided to sell 30% of equity in business to another private company for $300,000. The new private company made a counteroffer to take 30% stake into the business for $15,000. | ||||||||||||||||||||
| Structure the deal for the 2 financing rounds and determine the value of the firm at each stage, the % of ownership, no of total shares. | ||||||||||||||||||||
| Please explain what is the best deal for you and your friend after the two financing rounds and all scenarios. Why? Why not? | ||||||||||||||||||||
| Show your formulas and calculations under each scenario and present your solutions below. | ||||||||||||||||||||
3.
| Use only the data in the case. You don’t need to use any external sources. | |||||||||||||||||||
| Please answer the following questions: | |||||||||||||||||||
| 1. Perform an analysis of external factors presented in the case. | |||||||||||||||||||
| 2. Conduct a company analysis for Bluntly. | |||||||||||||||||||
| 3. Evaluate the potential acquirer. | |||||||||||||||||||
| 4. When valuing a private company what special considerations you might need to use. | |||||||||||||||||||
| 5. Value the private company using the data given in the case. | |||||||||||||||||||
| 6. Discuss the assumptions made. | |||||||||||||||||||
| 7. Which are the advantages and disadvantages of using different methodologies specifically for this case (be specific to this case). | |||||||||||||||||||
| If you make any assumptions, please be specific and justify your assumptions. Include a table with your assumptions specifying next to each assumption how you chose it. Show your formulas and calculations. | |||||||||||||||||||
| 1. Perform an analysis of external factors presented in the case. | |||||||||||||||||||
| 2. Conduct a company analysis for Bluntly. | |||||||||||||||||||
| 3. Evaluate the potential acquirer. | |||||||||||||||||||
| 4. When valuing a private company what special considerations you might need to use. | |||||||||||||||||||
0 comments