The founders and owners of a private company have funded it through the following rounds of investment:

Round Source Price Number of Shares

Series A Self $1.00 200,000

Series B Angel $1.00 300,000

Series C Venture Capital $1.25 400,000

The owners decide to take the company public through an IPO, issuing 1 million new shares. Assuming that they successfully complete the IPO, the net income for the next year is estimated to be $5 million. The price of shares is set using average price-earnings ratios for similar businesses of 17.0. What will be the IPO price per share?

Select one:

a. $12b. $36c. $45d. $22