CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

Shareholders of company X own 100 shares, which is 100% of equity. An investor makes a $10 million investment into a company X in return for 20 newly issued shares. In the second round, an investor agrees to make a $20 million for 30 newly issued shares. The post-money valuation after round 2 is:
A. $30 million.
B. $80 million.
C. $100 million.
Explanation: $20 million*(150/30)=$100 million. The pre-money valuation is $100-$20=$80 million.

User Contributed Comments 1

User Comment
vi2009 After round 2, total number of shares = 100 + 20 + 30 = 150
At round 2, 30 new shares for $20million.

150 / 30 *$20million = $100million

(by proportion ... )
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