What is the price per share (PPS) of the round and the total number of shares post-round?

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
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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The founders of XMP GmbH have created a successful software as a service platform and are now looking for venture capital to accelerate the growth of the company. Currently, the company is entirely founder-owned and has 10,000.00 shares outstanding. But before they start fundraising, they want their employees to participate in the success story of their business. Therefore, the founders issue shares to an employee share option program (ESOP) so that the entire ESOP represents 20.00% of the ownership of the company. Shortly after that, they receive an offer from the venture capital firm A-Capital. A-Capital offers to invest 4,000,000.00 € at a 16,000,000.00 € pre-money valuation. What is the price per share (PPS) of the round and the total number of shares post-round? 1) The price per share (PPS) equals 1,640.00 €; the total number of shares post-round equals 18,750.00. 2) The price per share (PPS) equals 1,220.00 €; the total number of shares post-round equals 16,525.00. 3) The price per share (PPS) equals 1,280.00 €; the total number of shares post-round equals 15,625.00. 4) The price per share (PPS) equals 1,960.00 €; the total number of shares post-round equals 19,650,00. A) Only (1) is correct B) Only (2) is correct C) Only (3) is correct D) Only (4) is correct
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