The Founder of a Company Currently Holds 12 Million of the 15

question 66

Multiple Choice

The founder of a company currently holds 12 million of the 15 million shares in that company. She considers an IPO where she sells a mix of primary shares and 2 million of her own secondary shares for $16 per share. If she wants to retain a 70% ownership of the company, how much money can she raise in this IPO?

• A) $9 million
• B) $12 million
• C) $15 million
• D) $24 million

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Definitions:

Statement of Changes

A financial report detailing the changes in equity of a company over a specific period.

ASPE

Accounting Standards for Private Enterprises, a set of accounting standards for privately-held companies in Canada, providing guidelines on financial reporting.

IFRS

International Financial Reporting Standards, a set of accounting rules and standards issued by the International Accounting Standards Board (IASB) to ensure consistency and transparency in financial reporting globally.

Basic Earnings Per Share

A measure of the amount of a company's profit that can be allocated to one share of its common stock, excluding any complex financial structures.