Use the Information for the Question(s)below

question 26

Multiple Choice

Use the information for the question(s) below.
You founded your own firm three years ago.You initially contributed $200,000 of your own money and in return you received 2 million shares of stock.Since then,you have sold an additional 1 million shares of stock to angel investors.You are now considering raising capital from a venture capital firm.This venture capital firm would invest $5 million and would receive 2 million newly issued shares in return.
-Assuming that this is the venture capitalist's first investment in your firm,the post-money valuation of the angel investor's shares is closest to:

• A)$12.5 million.
• B)$4.0 million.
• C)$5.0 million.
• D)$2.5 million.