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    Solve: Book Value per Share

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    I need help looking for the change in the book value per share for a company that is considering the sale of 12,000 shares of stock to finance the development of a new security product. The firm has 40,000 shares of common stock outstanding, par value of $1.00 per share. The firm has $60,000 in additional paid in capital and $80,000 in retained earnings. Borg's investment bankers that the new shares will bring in $5.15 per share. If it goes ahead with the new stock issue, what will be the change in book value per share?

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    Solution Preview

    Book value = Total equity/Number of shares
    Currently, total equity = 40,000 shares X $1 par + 60,000 (APIC) + 80,000 (RE) = ...

    Solution Summary

    This solution explains how to calculate the change in book value after a stock issue and includes all required calculations and formulas.