Simone Founded Her Company Using $150,000 of Her Own Money,issuing

question 41

Multiple Choice

Simone founded her company using $150,000 of her own money,issuing herself 300,000 shares of stock.An angel investor bought an additional 200,000 shares for $100,000.She now sells another 500,000 shares of stock to a venture capitalist for $2 million.What is the post-money valuation of the company?

• A)$2,000,000
• B)$2,250,000
• C)$4,000,000
• D)$6,000,000

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Definitions:

Risk Aversion

A preference for guaranteed outcomes over those with uncertainty, even if the uncertain outcome might offer a higher expected return.

Utility from Insurance

The satisfaction or utility gained by individuals from reducing uncertainty and risk in their lives through the purchase of insurance contracts.

Income Increase

Income increase refers to the rise in an individual's or household's earnings, affecting their purchasing power and consumption habits.

Fair Insurance Policy

An insurance policy for which the premium is equal to the expected value of the claim.