Question

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?

Answer 1

Answer:

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