Question

Three years​ ago, you founded your own company. You invested $ 114 comma 000 of your own money and received 5.7 million shares of Series A preferred stock. Your company has since been through three additional rounds of financing. Round Price​ ($) Number of Shares Series B 0.75 1 comma 000 comma 000 Series C 3.50 500 comma 000 Series D 7.50 600 comma 000 Assuming that you own only the Series A preferred stock​ (and that each share of all series of preferred stock is convertible into one share of common​ stock), what percentage of the firm do you own after the last funding​ round? After the last funding​ round, you will own nothing​%. ​(Round to one decimal​ place.) Enter your answer in the answer box.

Answer 1

The owner's % holding is 1.6%

Step-by-step explanation:

The percentage of the owner's holding in the company can be computed by making reference to the proportion of the cash invested viz-a-viz the other three rounds of financing received by the firm thereafter:

Round A preferred stock $114,000

Round B shares($0.75*1,000,000) $750,000

Round C series($3.50*500,000) $1,750,000

Round D series($7.50*600,000) $4,500,000

Value of the company $7,114,000.

the owner's % holding=$114,000/$7114000

=1.6%