Calculate the return Microsoft earned on its investment

Prior to the public offering, Facebook was able to raise capital from all the sources mentioned in the chapter. Let’s concentrate on one particular source, Microsoft Corporation.

a. Microsoft made one investment in Facebook, during October 2007. Go to Facebook’s corporate news website and locate the press release announcing this investment. Using the information in that press release and the number of shares owned by Microsoft listed in the IPO prospectus, calculate the per share price Microsoft paid.

b. Calculate the return (expressed on an annual basis) Microsoft earned on its investment up to the IPO (using the IPO price).

c. How much money did Microsoft receive from the IPO?


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