A company needs $1,500,000 for expansion. The directors decide to raise the capital by issuing new shares. How many shares does the company need to sell to raise the amount if the last share issue was at a price of $1 each, and the current market price for the company's shares is $1.50 per share?

Question

Quizplus · Accepted Answer

The company needs to raise $1,500,000 and the current market price per share is $1.50. Therefore, $1,500,000 / $1.50 = 1,000,000 shares need to be sold to raise the required amount.

A Company Needs $1,500,000 for Expansion