Multiple Choice
Use the table for the question(s) below.
David founds a company and goes through the investment rounds shown below:
He decides to take the company public through an IPO,issuing 2 million new shares.Assuming that he successfully completes the IPO,the net income for the next year is estimated to be $8 million.His banker informs him that the price of shares should be set using average price-earnings ratios for similar businesses,which is 15.0.
-What share of the company will David own after the IPO?
A) 11%
B) 14%
C) 16%
D) 22%
E) 50%
Correct Answer:
Verified
Correct Answer:
Verified
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