J. Bourne Security Products (JBSP) is a successful company, but it needs $200,000 in additional funding to

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J. Bourne Security Products (JBSP) is a successful company, but it needs $200,000 in additional funding to grow. JBSP and an angel investor agree the business is worth $800,000 and the angel has agreed to invest the $200,000 that is needed. There are currently 40,000 shares outstanding. What is a fair price per share and how many additional shares must JBSP sell to the angel? Because the stock will be sold directly to an investor, there is no spread; assume other flotation costs are insignificant.

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Financial Management Theory And Practice

ISBN: 978-0176583057

3rd Canadian Edition

Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason

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