A venture capitalist invests in a company by means of buying* 6 million shares for...

41WorkingsEquity investment by the venture capitalist6 million shares at $3 eachEquity invested = 6m × $3 = $18 millionRequired return on equityTarget return = 20% per year, compound, for 3 yearsFuture value of equity stake in 3 years:18×(1.2)3=18×1.728=31.104 million18 \times (1.2)^3 = 18 \times 1.728 = 31.104 \text{ million}18×(1.2)3=18×1.728=31.104 million So, in 3 years the VC’s 6m shares must be worth $31.104m.Implied total equity value of the companyTotal shares in issue = 8 millionVC owns 6m of 8m → 75% of the equity.If 75% is worth $31.104m, total equity value is:31.1040.75=41.472 million\frac{31.104}{0.75} = 41.472 \text{ million}0.7531.104​=41.472 million Rounded to the nearest $ million≈$41 million\approx \boxed{\$41 \text{ million}}≈$41 million​