Questions from Entrepreneurial Finance

Q: Why do the numerical examples of this chapter involve a large dividend

Why do the numerical examples of this chapter involve a large dividend in the last year of the explicit forecast period?

Q: Why do net income and cash flow in the numerical examples in

Why do net income and cash flow in the numerical examples in this chapter both grow at the same rate (g) in the terminal value period? Why is this important?

Q: What ingredients would you need to conduct a traditional equity method valuation

What ingredients would you need to conduct a traditional equity method valuation for Foursquare? If you had the necessary projections, do you think that they would also suggest the $80 to $100 millio...

Q: What is a venture’s present value? Does the past matter?

What is a venture’s present value? Does the past matter?

Q: What is meant by a capitalization (or cap) rate in

What is meant by a capitalization (or cap) rate in reference to calculating a terminal value? What other types of terminal values might be appropriate (i.e., other than smooth growth procedures)?

Q: What is a stepping stone year? Why is it important in

What is a stepping stone year? Why is it important in determining a venture’s value?

Q: What is the difference between the direct comparison method and the direct

What is the difference between the direct comparison method and the direct capitalization method?

Q: Describe two important motives for having an equity component in employee compensation

Describe two important motives for having an equity component in employee compensation.

Q: How does an organized securities exchange differ from an over-the

How does an organized securities exchange differ from an over-the-counter market?

Q: Describe the following terms from the perspective of venture performance: black

Describe the following terms from the perspective of venture performance: black hole, living dead, and venture utopia. In what sense is the typical business plan utopian?