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cdoner
Feb 22, 2008, 01:54 PM
How do I calculate the average issue price of common stock and preferred stock?
Thanks for your help!

morgaine300
Feb 22, 2008, 08:00 PM
An average is just totaling everything and dividing by how many you have. However, this likely would be a weighted average. That is, if you had only issued one share each at $10, $12 and $13, you could just average those 3 numbers. But you're issuing a lot of shares at once. So you have to multiply them all out to account for the total number of shares sold in that average. For example, if you had the following sales:

1000 @ $10 = 10,000
2000 @ $12 = 24,000
1500 @ $13 = 19,500

So you actually have 4500 shares, and $53,500 of total issuance prices. i.e. you don't have 3, because each price has be "weighted" by the number of shares. ($12 weights the most cause there's more of them.) So 53,500/4500 = $11.89 average per share.

cdoner
Feb 24, 2008, 06:28 PM
Thank you so much. I wasn't thinking all lines together.