chapter 15

Question 1

enterprise value

Answer 1

FCF (1+g) / WACC - g

Question 2

equity value

Answer 2

EV - debt + surplus cash

Question 3

per share value

Answer 3

equity value / total shares outstanding

Question 4

venture investors’ value (final value)

Answer 4

investors’ value x per share value

Question 5

founders’ value (final value)

Answer 5

founders value x per share value

Question 6

percentage appreciation

Answer 6

1. initial investment = shares owned x investment per share
2. final value = shares owned x final value per share
3. % appeeciation = (final value-initial investment / initial investment) x 100

Question 7

compound rate of return

Answer 7

(final value / initial investment) ^¹/t - 1

final value = price per share
initial investment = purchase price per share
t = num of years the investment was held