Question 5

Jane is currently the 100% owner of a start-up, Pinder Ltd. Jane believes that she needs additional funds to expand the business. Jane obtains a $0.7 million investment from an angel investor for a post-money valuation of $2.9 million. Which of the following values is closest to Jane's ownership of the firm after the investment from the angel investor?

Group of answer choices

78%

72%

76%

80%

74%

Question 6

After successfuly growing her business, Jane takes Pinder Ltd public through an initial public offering. In the IPO, Jane sold 15,000 of her own shares and the angel investor sold 2,000 of its shares. Pinder Ltd also issued 50,000 new shares to fund further investments. The subscription price was initially expected to be around $12, but due to its popularity, the final subscription price was $18. In the first day of trading the share price for Pinder Ltd closed at $27.21. The average daily closing price for the first 5 days of trading was $26.32. Which of the following values is closest to underpricing of Pinder Ltd's IPO?

Group of answer choices

46%

40%

56%

34%

51%