Management of Carla Vista, Inc., is planning to raise $1,215,000 in new equity through a private placement. If the sale price is

Question

mr_godi [17]

3 years ago

14

Management of Carla Vista, Inc., is planning to raise $1,215,000 in new equity through a private placement. If the sale price is

$20.25 per share, how many shares does the company have to issue

Business

1 answer:

Alexeev081 [22] · Answer 1 · 2022-02-20T19:53:07+03:00

Answer:

Number of shares to be issued = 60,000 units

Explanation:

<em>A private placement involves the issue of new shares to a few number of individual and institutional investors. Unlike initial public offering, here the shares are not offered to the general public.</em>

The number of units to be issued is determined as follows

Units to be issued = Total capital to be raised / issue price per share

Number of units to be raised = $1215,000/$20.25 per share= 60,000 units

Number of shares to be issued = 60,000 units