Question

Authorized and available shares Aspin​ Corporation's charter authorizes issuance of 2 comma 700 comma 000 shares of common stock.​ Currently, 1 comma 500 comma 000 shares are​ outstanding, and 100 comma 000 shares are being held as treasury stock. The firm wishes to raise $ 56 comma 000 comma 000 for a plant expansion. Discussions with its investment bankers indicate that the sale of new common stock will net the firm ​$40 per share. a. What is the maximum number of new shares of common stock that the firm can sell without receiving further authorization from​ shareholders?

Answer 1

$1,200,000

Step-by-step explanation:

The computation of the maximum number of new shares of common stock is shown below:

= Total authorized shares - total outstanding shares

= $2,700,000 - $1,500,000

= $1,200,000

We simply subtract the total outstanding shares from the total authorized shares, so that the maximum number of shares could find out.

All other information which is given is not relevant. Hence, ignored it