Reference no: EM131898324
Let's assume you open a corporation and the state where you open your business in authorizes 1,000 million or 1 billion shares. Assume you can obtain $ 800,000 from 4 family members or investors who bought stocks of your firm, each with $200,000 investment and $150,000 from a good friend plus you invest $50,000 (based on personal assets you have). If the face value is $0.05 per share, how many shares each investor, including yourself, would receive? How many shares would be outstanding?
Family
200,000 /.05 = 4,000,000 * 4 = 16,000,000
Friend
150,000 / .05 = 3,000,000
Self
50,000 / .05 = 1,000,000
Total:
16,000,000 + 3,000,000 + 1,000,000 = 20,000,000
Outstanding Shares:
1,000,000,000 - 20,000,000 = 980,000,000
Answer: 980,000,000