Calculate the annual rates of return realized by each investor vintage from 2010 to 2012, assuming they all exit immedia

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Calculate the annual rates of return realized by each investor
vintage from 2010 to 2012, assuming they all exit immediately after
the 2013 equity raise. Suppose BIM will fund its capital
expenditures on June 30 of each respective year using 75% debt and
25% equity. For example, for the 2010 capital expenditures, BIM
will raise 75% debt and 25% equity on June 30, 2010, and make the
required payment on the same date to the suppliers. (BIM will raise
this debt/equity combination for each of the next four years,
starting immediately.) Suppose the required public-market returns
for a project like BIM’s are as follows: 8% as of the start of the
first buildout year, 7% as of the start of second buildout year, 6%
as of the start of third buildout year, and 5% once the production
starts. Clearly, you will have to calculate the (1) equity raise
required as of each mid-year date, (2) post-money valuation based
on the required rates of return on all future cash flows, and (3)
proportional issue of new shares (equity dilution) in each equity
raise. Assume that each equity raise will be in the form of a
private placement to a new set of investors. You can identify these
investors by their vintage: for example, equity raise on June 30,
2010, will be from 2010 Investors. Note that all outstanding shares
of BIM (incl. those issued in private placements) will continue to
be traded on the TSX. The time horizon for 2010 Investors will be 3
years, 2011 Investors 2 years, and 2012 Investors 1 year.