Assume in a VC financing event, a target company gets a pre-money valuation of $5 million, the amount invested by the VC investors is $2 million. The principal plus accrued interest on outstanding promissory notes is $2 million, and the discounted rate for conversion of notes is 20%. The shares outstanding on a fully diluted basis prior to the investment are 2 million shares. Using the pre-money method, the post-money value of the company after the conversion of the convertible bond is $__________ million.

7

2

9.68

10.75