A company with four equal share co-founders creates an Employee Stock Option Pool including up to 10% of the company's stocks. How much will the co-founders own on a fully diluted basis (meaning if the entire pool is issued and no options are issued to the co-founders themselves)? 12.5% 22.5% 27.5% 32.5%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A company with four equal share co-founders creates an Employee Stock
Option Pool including up to 10% of the company's stocks. How much will
the co-founders own on a fully diluted basis (meaning if the entire pool is
issued and no options are issued to the co-founders themselves)?
12.5%
22.5%
27.5%
32.5%
Transcribed Image Text:A company with four equal share co-founders creates an Employee Stock Option Pool including up to 10% of the company's stocks. How much will the co-founders own on a fully diluted basis (meaning if the entire pool is issued and no options are issued to the co-founders themselves)? 12.5% 22.5% 27.5% 32.5%
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