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The reason that I asked my previous question is that the Private

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Company sells its...
The reason that I asked my previous question is that the Private Company sells its PREFERRED stock to investors at $60, and they gave an employee 100 options of common stock for $20, and they say that they have given him the equivalent of $4000. Is it correct?
Submitted: 1 year ago.Category: Finance
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Answered in 7 minutes by:
4/27/2016
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12,855
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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That takes us back to the very same issue ... What IS the underlying value of the company... The best way to value the company is to have an appraiser do it....Another indication of the value of EITHER common or preferred would be worth, when there is any activity in the stock, again, is what a disinterested (not having an ownership or other interest in the company) would pay for it....If there have not been any purchases of outstanding common stock from disinterested owners (not founders, not employees, but true third party owners) that is one anecdotal way to have a feel for the stock's value....But if a real valuation of the enterprise (based on it's earnings) has not been done, it's all conjecture
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