In its first round of venture funding, SlickBrud received $2 million from a single venture capital firm, DreamVorks, to which it allocated 20 million shares. In a subsequent round, SlickBrud raised $8 million by releasing another 20 million shares to a new venture capital firm. As a result, the equity share of DreamVorks dropped to 20%. Which of the following statements is correct? (Pick one).
In its first round of venture funding, SlickBrud received $2 million from a single venture capital firm, DreamVorks, to which it allocated 20 million shares. In a subsequent round, SlickBrud raised $8 million by releasing another 20 million shares to a new venture capital firm. As a result, the equity share of DreamVorks dropped to 20%. Which of the following statements is correct? (Pick one).
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 4TP: On November 7, 2013, Twitter released its initial public offering (IPO) priced at $26 per share....
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![In its first round of venture funding, SlickBrud received $2
million from a single venture capital firm, DreamVorks, to
which it allocated 20 million shares. In a subsequent round,
SlickBrud raised $8 million by releasing another 20 million
shares to a new venture capital firm. As a result, the equity
share of DreamVorks dropped to 20%. Which of the
following statements is correct? (Pick one).
The share price of SlickBrud following the second round is 20
cents
The equity share of the second firm is 50%
The total value held by equity holders of SlickBrud is $40
million.
O The total number of shares outstanding is 40 million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc4fb8b4-6ecf-4aae-9ea8-b92d2c07bdf5%2F6c73ed04-87f2-4008-a48e-21996f82f204%2Fvl5oqqa_processed.png&w=3840&q=75)
Transcribed Image Text:In its first round of venture funding, SlickBrud received $2
million from a single venture capital firm, DreamVorks, to
which it allocated 20 million shares. In a subsequent round,
SlickBrud raised $8 million by releasing another 20 million
shares to a new venture capital firm. As a result, the equity
share of DreamVorks dropped to 20%. Which of the
following statements is correct? (Pick one).
The share price of SlickBrud following the second round is 20
cents
The equity share of the second firm is 50%
The total value held by equity holders of SlickBrud is $40
million.
O The total number of shares outstanding is 40 million
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