Use the Information for the Question(s)below

question 6

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.
-Assuming that this is the venture capitalist's first investment in your firm,what percentage of the firm will the venture capitalist own?

• A)50%
• B)40%
• C)25%
• D)33%

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Definitions:

Groundwater Flowing

The movement of water beneath the Earth's surface through soil and rock formations.

Subsurface Material

Material (such as rocks, soil, and sediment) found beneath the surface layer of the Earth, important in geotechnical engineering and environmental studies.

Permeability

A measure of how easily fluids can flow through a porous rock or material.

Uncompacted Clays

Clay material that has not been subjected to pressure, typically soft and easily deformed, often leading to stability issues in construction.