Homework: Small Business Financing
1) Pricing and exit strategy are the main instruments used by Private Equity; explain how do PE implement them on developing countries and whether there are some difficulties they face on pricing & exit strategy? What kind of exit strategy do you think is common? (2points)
2) Assume an insurance company invest in different Venture Capitalist and has these Cash flows as follow on the table (3 points)
2015 2016 2017 2018 2019 2020 2021 2022 2023 IRR
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2015
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2016
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2017
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2018
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2019
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2020
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2021
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2022
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2023
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IRR
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A
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-200 million SAR
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50 million SAR
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0 SAR
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60 million SAR
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-40 million SAR
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100 million SAR
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0
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90 million SAR
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80 million SAR
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|
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B
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-100 million SAR
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0
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0
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0
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-50 million SAR
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0
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0
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-25 million SAR
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400 million SAR
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C
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-300 million SAR
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50 million SAR
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10 million SAR
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0
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-50 million SAR
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200 million SAR
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50 million SAR
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0
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50 million SAR
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D
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-50 million SAR
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10 million SAR
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10 million SAR
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10 million SAR
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10 million SAR
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10 million SAR
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10 million SAR
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10 million SAR
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10 million SAR
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Pooled
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A, B, C, D are different VC this insurance company invest in.
a) Calculate each venture capitalist's IRR.
b) Calculate Average IRR.
c) Calculate pooled cash flow and its IRR
d) Analyze B and D based on what you see on their CF and IRR.
Format your homework according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.