John Smith seeks $7.5 million from a VC fund.John and the VC agree that the company should be ready to go public in 4 years.At that time the company should have a net income of $3.75 million.If comparable firms are expected to be trading at a P/E ratio of 18,what will be the company's market capitalization at the time of the IPO?
A) $7.5 million
B) $67.5 million
C) $135 million
D) $95.7 million
Correct Answer:
Verified
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