A potential investor is seeking to invest $500,000 in our venture, which currently has 2,000,000 million shares held by us founders. We expect our venture to produce one million dollars of net income in year five at which time we want to sell the business. We know that a similar venture with $2,000,000 in net income was sold for $40,000,000.

What is the percent ownership of our venture that must be sold in order to provide the venture investors target return of 40%?

A. 13.43

B. 18.45

C.33

D.26.86