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John Smith Seeks $7

Question 44

Multiple Choice

John Smith seeks $7.5 million from a VC fund.John and the VC agree that the company should be ready to go public in 4 years.At that time the company should have a market capitalization of $146.75 million.If the VC requires a 54% return on their investment,what is the fraction of the firm that the VC will receive for its $7.5 million investment?


A) 28.74%
B) 71.26%
C) 54.00%
D) 38.57%

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