Suppose EBV is considering a $5M Series A investment in Newco. EBV proposes to structure the investment as ,5M shares of PCP with a threshold at $3 per share. The employees of Newco have claims on 15M ,shares of common stock. Thus, following the Series A investment, Newco will have 15M common shares outstanding, ,with another 5M shares on conversion of the Series A. , ,(a) Compute the LP cost for this investment. ,(b) Solve for the LP valuation equation for this investment. ,
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