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The Founders and Owners of a Private Company Have Funded

Question 43

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The founders and owners of a private company have funded it through the following rounds of investment: The founders and owners of a private company have funded it through the following rounds of investment: The owners decide to take the company public through an IPO,issuing 1 million new shares.Assuming that they successfully complete the IPO,the net income for the next year is estimated to be $5 million.The price of shares is set using average price-earnings ratios for similar businesses of 17.0.What portion of the company will be owned by the angel investor after the IPO? A) 12% B) 16% C) 22% D) 30%
The owners decide to take the company public through an IPO,issuing 1 million new shares.Assuming that they successfully complete the IPO,the net income for the next year is estimated to be $5 million.The price of shares is set using average price-earnings ratios for similar businesses of 17.0.What portion of the company will be owned by the angel investor after the IPO?


A) 12%
B) 16%
C) 22%
D) 30%

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