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

Angina Inc. will net a total of $5,113,200 from the stock sales.

Step-by-step explanation:

To calculate the cash that Angina Inc. will net from the stock sales, we need to consider the two parts of the offering. The first part involves selling 1 million shares at $18 per share, netting 95% of the sale proceeds. The second part involves selling 252,000 shares at 90% of the offering price.

To calculate the cash from the first part, we can multiply the number of shares (1 million) by the offering price ($18) and then multiply it by the netting percentage (95%). This gives us $1,026,000.

To calculate the cash from the second part, we can multiply the number of shares (252,000) by 90% of the offering price, which is $16.20. This gives us $4,087,200.

Adding the cash from both parts, the total cash netted from the stock sales is $1,026,000 + $4,087,200 = $5,113,200.

Answer 2

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

Step-by-step 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