You founded a firm some time ago, and own all of the 500 000 outstanding stocks. Now you need additional capital in order to grow. A venture capitalist is willing to invest $1 million for a 40% share of your company. You plan to issue new shares to sell to the venture capitalist.

a. How many shares must you issue and sell to the venture capitalist so that they end up with 40% share of your company? number of shares (answer in whole integer with no decimals and no blank spaces).

b. Now assume that you sold 250 000 new shares to the venture capitalist for $1 million. What was the pre-money valuation of your firm? $ millions (answer in millions, with two decimals; for example 10.45, not 10 450 000).

c. Now instead assume that you sold the 250 000 new shares for $3.5 per share to the venture capitalist. What was the post-money valuation of your firm? $ millions (answer in millions, with two decimals; for example 10.45, not 10 450 000).