Final answer:
Face 2 Face Corporation has 180 issued shares. Investors 1 and 2 in the Darkroom Windowshade Company do not hold a majority, hence cannot guarantee their influence. Babble, Inc. investors should calculate the present value of future profits to determine the share price.
Step-by-step explanation:
The Face 2 Face Corporation reports 120 outstanding shares, 600 authorized shares, and 60 shares of treasury stock. The number of issued shares is the sum of outstanding shares and treasury stock. Therefore, to calculate the issued shares: 120 outstanding shares + 60 treasury stock shares = 180 issued shares.
Now let's consider another scenario provided, where the Darkroom Windowshade Company has 100,000 shares of stock outstanding, reflecting the total shares held by all shareholders. To change the company's top management, a majority vote is typically required. Adding the shares of the top two investors, investor 1 with 20,000 shares and investor 2 with 18,000 shares, they collectively hold 38,000 shares. This is not more than 50% of the shares, which means that investors 1 and 2 cannot be certain of always getting their way in how the company is run, as they do not constitute a majority on their own.
In the case of Babble, Inc., an investor would consider the present value of future profits to determine what they would pay for a share of stock. If the company distributes all profits as dividends, an investor would sum the present value of the anticipated $15 million immediate profit, $20 million one year from now, and $25 million two years from now, and then divide by the 200 shares to find the value per share.