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 $9 million
David found a company and goes through the investment rounds shown below:
Round Source Price Number of Shares
Series A Self $0.50 375,000
Series B Angel $1.00 400,000
Series C Venture Capital $1.50 250,000
Series D Venture Capital $2.25 400,000
His banker informs him that the price of shares should be set using average price-earnings ratios for similar businesses, which is 14. What will be the IPO price per share?
A) $3.68
B) $22.07
C) $36.79
D) $68.06
Answer: C
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