You Are a Venture Capitalist Who Is Approached by a Firm

question 90

Multiple Choice

You are a venture capitalist who is approached by a firm that is willing to sell you 30% of the firms common stock.You believe the firm will be worth $800 million dollars when it IPOs in 5 years.If you require a 50% return on investments with this firm's risk characteristics,what amount will you have to invest today in order to purchase 30% of the firm's common shares?

• A) $240.000 million
• B) $105.350 million
• C) $31.605 million
• D) none of the above

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Definitions:

Self-esteem

is the perception one has of their own value or worth, often influencing mental health and behavior patterns.

Ability

The possession of the means or skill to perform tasks or actions effectively.

Succeed

To achieve a desired outcome, goal, or objective, often through effort or skill.

Perspective

An attitude towards or way of regarding something; a point of view.