Pricing Stock Issues

Benjamin Garcia's start-up business is succeeding, but he needs $204,000 in additional funding to fund continued growth. Benjamin and an angel investor agree the business is worth $816,000 and the angel has agreed to invest the $204,000 that is needed. Benjamin presently owns all 39,000 shares in his business. Because the stock will be sold directly to an investor, there is no spread; the other flotation costs are insignificant.

What is a fair price per share? Do not round intermediate calculations. Round your answer to the nearest cent.

$

How many additional shares must Benjamin sell to the angel? Do not round intermediate calculations. Round your answer to the nearest whole number.

shares