When a Company Founder Sells Stock to Outside Investors in Order

question 67

True/False

When a company founder sells stock to outside investors in order to raise capital, the share of the company owned by the founder and the founder's control over the company will be reduced.

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Definitions:

Present Value

The value right now of a sum of money expected in the future or a sequence of cash inflows, factoring in a specific rate of return.

Discount Rate

This is the rate of interest utilized in the process of discounted cash flow analysis to calculate the current value of future cash flows.

Received

Amounts of money or assets that have been taken in by an individual or organization.

Years

Units of time measuring the duration or length of events or intervals typically consisting of 365.25 days in the Gregorian calendar.