The Founder of a Company Issues 100,000 Class a Preference

question 48

Multiple Choice

The founder of a company issues 100,000 Class A preference shares for his own $250,000 investment. He then goes through three further rounds of investment, as shown below: $$\begin{array} { l c c } \text { Round } & \text { Price } & \text { Number of Shares } \\\hline \text { Class B } & \$ 2.50 & 200,000 \\\text { Class C } & \$ 2.75 & 300,000 \\\text { Class D } & \$ 2.80 & 200,000\end{array}$$ What is the post-money valuation for the Class D funding round?

• A) $2.14 million
• B) $2.43 million
• C) $2.24 million
• D) $1.96 million

Learn how to compute the margin of safety and its implications for business stability.

Grasp the concept and calculation of contribution margin and contribution margin ratio.

Understand how changes in sales volume, prices, and costs affect net income.

Learn to calculate and interpret the degree of operating leverage.

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