hard · Private Equity
A growth equity fund has a 'weighted average' anti-dilution provision. It holds $1M shares bought at $10.00. A down round issues $1M new shares at $5.00.
If the company had $4M shares outstanding before the down round, what is the new conversion price?
- $9.50
- $9.00
- $7.50
- $5.00
Sign up free to see the explanation and track your rank →
More Private Equity practice
- If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventua
- Following the investment, what is the investor's ownership percentage in the company, assu
- What is the Interest Coverage Ratio?
- A private equity firm is calculating a 'Public Market Equiva… — If the KS-PME score is 1.1
- A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose o
- What is the new effective conversion price for the growth equity investor?
- Which company will report a higher 'Gross Margin' and a higher ending 'Inventory' value on
- What is the company's Interest Coverage Ratio?