Use the Information for the Question(s)below

question 27

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.
-The post-money valuation of your firm is closest to:

• A)$12.5 million.
• B)$5.2 million.
• C)$10.0 million.
• D)$5.0 million.

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Definitions:

Statutory Law

Law that is written and enacted by a legislative body, distinguishing it from common law or judge-made law.

Valid Contract

An agreement that meets all legal requirements and is enforceable by law.

Contractual Capacity

The legal ability of a person to enter into a contract.

Legal Ability

Legal ability refers to the combination of knowledge, skills, and competence that enables a practitioner to effectively perform legal tasks and duties in compliance with the standards of the profession.