Use the Information for the Question(s)below

question 71

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.
-After the venture capitalist's investment,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

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Definitions:

Skates

Cartilaginous fishes belonging to the family Rajidae in the superorder Batoidea of rays. More broadly, "skates" can refer to ice or roller skates used in sports and recreation.

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Extinct hominin; earliest named Homo species; known only from Africa, where it arose 2.3 million years ago.

Homo Erectus

An extinct species of early human that lived throughout Africa and Eurasia during the Pleistocene Epoch.

Vertebrate Lung

A respiratory organ found in vertebrates that exchanges oxygen and carbon dioxide with the environment.