PDA

View Full Version : Price/number of new common stock


bla11
Mar 2, 2013, 11:44 AM
Hi,

I have a question about issuing new common stock for an investment.
Given the company's balance sheet;

Company B Balance Sheet
Assets €1,000,000 Equity €1,000,000

Number and price of outstanding costs, as well as initial cost of the investment and PV of net cash flows, how can I derive new common stock price and number? (the whole amount will be financed through issuing additional common stock)

I only need a few pointers, not the answer :-)
I have tried many sources, but I cannot find how to approach the problem, everything seems relevant to Dividends, for which there is no mention in the exercise.

Thanks