Angina Inc. has 5 million shares outstanding. The firm is considering issuing an additional 1 million shares. After selling these shares at $18 per share offering price and netting 95 % of the sale proceeds, the firm is obligated by an earlier agreement to sell an additional 252 comma 000 shares at 90 % of the offering price. In total, how much cash will the firm net from these stock sales?

Question

Business

Rubi Fitzpatrick

11 September, 03:28

Angina Inc. has 5 million shares outstanding. The firm is considering issuing an additional 1 million shares. After selling these shares at $18 per share offering price and netting 95 % of the sale proceeds, the firm is obligated by an earlier agreement to sell an additional 252 comma 000 shares at 90 % of the offering price. In total, how much cash will the firm net from these stock sales?

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Answers (1)

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Arely Whitehead · Answer 1

The $21,182,400 cash is from these stock sales

Explanation:

The computation of the cash received is shown below;

= (Additional shares * price per share * sale proceed percentage) + (Additional shares * price per share * offering price percentage)

= (1,000,000 shares * $18 * 95%) + (252,000 shares * $18 * 90%)

= $17,100,000 + $4,082,400

= $21,182,400

Since we have to compute the cash received amount, so the outstanding shares part is not relevant. That's why we do not considered it in the computation part