Assume a company had an A-round in which it sold 10 million shares of convertible preferred stock at $1.00 per share. Prior to the financing, Founders and Management owned 15 million shares of common stock. The company needs to raise an additional $5 million in a Series B round and learns that the investors insist on a pre-money valuation of $15 million. Your assignment is to figure out the new price per share of Series B convertible preferred stock under the following scenario:

There is full ratchet anti-dilution for prior investors (i.e., old investors are issued new shares for free such that their effective price equals the new price being paid by new investors).

Hint: Shares Outstanding Before Series B = Founders Shares + Series A Shares after anti-dilution