Melanie Founded Her Company Using $250,000 of Her Own Money,issuing

question 25

Multiple Choice

Melanie founded her company using $250,000 of her own money,issuing herself 100,000 shares of stock.An angel investor bought an additional 50,000 shares for $350,000.She now sells another 190,000 shares to a venture capitalist for $750,000.What percentage of the firm does Melanie now own?

• A)33%
• B)19%
• C)29%
• D)50%
• E)38%

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Definitions:

Financial Position

Describes an entity's financial health, assessed by examining its assets, liabilities, and equity at a specific point in time.

Statement of Income

A financial statement that shows a company's revenues, expenses, and net income over a specific period, also known as an income statement.

Bonds

Fixed-income investment products representing loans made by an investor to a borrower, typically corporate or governmental, which borrows the funds for a defined period at a variable or fixed interest rate.

Common Shares

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company's profits.