Question

) A contact tells you that DriveX's valuation was 30 times higher after the IPO, compared with before the IPO. Based on the information contained in the article, how likely is it that this statement is true

Answer 1

Complete Question:

The complete question is shown in first and second uploaded image  

Answer:

Explanation:

In order to gain a good understanding of the question and the let us shed light on some term

PUBLIC OFFERING:

This can be defined as a way of making the stock of a particular company available to the public.We can define a stock as the equity of a company that is divided into so many unites in order for multiple people to gain some ownership of the business.

IPO(Initial Public Offering):

This is a type of public offering where a company see its stock to the public for the first time,through this process a a private company becomes a public company and this type of public offering is used by companies to raise capital to run their business. IPO valuation is a term that explains how valuable a company stock  and this is influence by many factor like the customer demand for the companies stock, industries that in the same in the same business that have also gone public e.t.c.

From the question we see that the correct statement for question a is D(Slightly Likely)

This is because

The pre IPO Valuation = 40 mn + 0.43 mn = 400.43mn Dollars

The post  IPO valuation = 15000 mn dollar

      Post IPO valuation /Pre IPO valuation  = 15000/400.43 ≈ 37

Note: mn stands for million

We can see that the value we obtained is close to 33, which means that the statement is likely to be true

) For the question the correct answer is(B) that this article is meant to help the reader make good investment decisions