Based on the following information, estimate the percentage appreciation on stock bought by the founders: founders' purchase price = $1.00; venture investors' purchase price = $2.00; current stock price = $10.00; founders' holding period = 5 years; and venture investors holding period = 3 years.

Question

Quizplus · Accepted Answer

The percentage appreciation is calculated as [(current price - purchase price) / purchase price] * 100. For the founders, this is [(10 - 1) / 1] * 100 = 900%.

Based on the Following Information, Estimate the Percentage Appreciation on Stock