1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
melomori [17]
3 years ago
12

Benjamin Garcia's start-up business is succeeding, but he needs $210,000 in additional funding to fund continued growth. Benjami

n and an angel investor agree the business is worth $840,000 and the angel has agreed to invest the $210,000 that is needed. Benjamin presently owns all 37,000 shares in his business.
Required:
What is a fair price per share and how many additional shares must Benjamin sell to the angel?
Business
1 answer:
Dima020 [189]3 years ago
6 0

Answer:

Missing word <em>"Because the stock will be sold directly to an investor, there is no spread; the other flotation costs are insignificant"</em>

<em />

Fair Price is based on the current valuation of business and that is $840,000 in this case.

Fair Price = Current Value of Business/Number of Outstanding Shares

Fair Price = $840,000 / 37,000 shares

Fair Price = 22.7027027

Fair Price = $22.70.

Number of Additional Shares = Additional Funding Required/Fair Price Per Share =

Number of Additional Shares = $210,000 / $22.70

Number of Additional Shares = 9251.101321585903

Number of Additional Shares = 9251 shares

So, since additional funding of $210,000 is required, Benjamin will have to sell 9,251 shares as additional shares to the Angel.

You might be interested in
Suppose that corn farmers want to increase their total revenue. Knowing that the demand for corn is inelastic, corn farmers shou
In-s [12.5K]

Answer:

The corm farmers should reduce or decrease the number of acres on which they plant the corn. Therefore, the correct answer is C

Explanation:

The demand for the product is inelastic which means it is a situation or scenario in which the demand of the product does not increase or decrease likewise with rise or fall in the price of the product.

In order to increase the aggregate revenue on the product (corn) whose revenue is inelastic, the farmers should decrease the number of acres on which they grow or plant the corn.

4 0
3 years ago
Which of the following functions is most closely connected with the CPSC?
Alecsey [184]
The answer  is A- ensuring product safety and setting safety standards
5 0
3 years ago
Read 2 more answers
Which of the following nations is not one of the three members of the North American Free Trade Agreement (NAFTA)?
goblinko [34]
The answer to this question should be A
8 0
3 years ago
Read 2 more answers
You receive $100 today, $200 in one year, and $300 in two years. if you deposit these cash flows into an account earning 10 perc
lbvjy [14]

Answer:

$628.49

Explanation:

Cash flows                     Discount factor      Future value

$100                         1.1449                $114.49

$200                         1.07                   $214

$300                          1                        $300

Future value                                                  $628.49

The discount factor is as follows

= (1 + interest rate)^number of years

For $100 the year is 2

For $200 the year is 1

For $300 the year is 0

5 0
2 years ago
Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government s
Sloan [31]

Answer:

The correct answer is A) Lend support to the invisible hand by maintaining property rights and political stability .

Explanation:

The absence of the government in legislative tasks related to the market is, therefore, one of the main bases of the economic theory developed by Adam Smith throughout his bibliographical work. For Smith, the leaders must deal with other areas of control more focused on defense or justice, leaving the market to its free operation.

The invisible hand presupposes that there is an inertia by which the market and its self-regulation leads individuals to make the best decisions for the majority of the population to achieve well-being. In other words, it is a kind of automatic control mechanism that compensates the actions taken as a whole, regulating social conformations.

Therefore, it is assumed that the self-regulation facilitated to the markets helps to achieve an optimal market. To do this, individuals must behave in such a way that they can act without state mediation and in pursuit of their own interest.

The metaphor of the invisible hand also supposes that individuals are encouraged or held back to produce or not to follow the level of prices that exist in the market. Prices and profits are sufficient indicative to know when to participate in the market or not. Basically, if there is profit in a market niche, this supposes a stimulus for production, while losses lead individuals to quit.

7 0
3 years ago
Other questions:
  • Sunland Company has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2022. No dividen
    8·1 answer
  • You are trying to decide whether you should go to college. To help decide, you compare what you would sacrifice to go to college
    13·1 answer
  • What are the objectives of business​
    8·1 answer
  • What role does utilityLOADING... play in the economic model of consumer​ behavior? When modeling consumer​ behavior, utility
    15·1 answer
  • Olamide is a manager at a catering company, organizing an upcoming wedding. she will need to allocate a portion of her staff to
    9·1 answer
  • Why is it better to underestimate your income instead of overestimating when creating a budget?
    15·1 answer
  • Define fannie mae and freddie mac.​
    15·1 answer
  • The following table shows the assets and liabilities of the Chang family in 2007 and 2008.
    13·1 answer
  • What part of the business plan deals with details about promotion, pricing, and distribution, as well as on how the business wil
    10·1 answer
  • You are looking for ways to save money when it comes to feeding your family. What is the most helpful way to cut back on food ex
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!