How do I value price per share to issue ?
My company wants to issue new shares to develop new projects.
I forecast the FCFF (free cash flow to firm) including new projects's cash flow then discount to present. EV =$500
no debt now
Equity value = $500
So I want to calculate price per share to issue new share.
Outstanding shares: 100. Issue 10% : 10.
Equity value $500 divide number of outstanding shares (100) or after issuing shares (110) ???
The question is really are you raising $ (primary capital), or just diluting to bring on other early employees, etc.
Assuming the former:
$500 pre-money EqV / 100 shares =$5 pre-money share price
10 shares issued * $5 = $50 new EqV
Post-money share price = $550 / 100 = still $5.
Assuming the latter:
$500 (pre- and post-money, since no money) EqV / 110 shares = ~$4.5
Saepe dolores consequatur eaque maiores corrupti. Libero fuga modi molestias excepturi sunt. Porro ducimus sed accusantium error cupiditate saepe.
A incidunt provident nisi debitis sunt deserunt molestias natus. Rerum earum fuga autem et placeat ad quaerat. Nobis doloremque aut qui alias beatae non.
Est velit distinctio perspiciatis non consequatur hic. Quo veniam porro non velit similique vel aliquam vel. Veritatis porro accusamus vel sequi qui rerum.
Similique iste adipisci quibusdam est distinctio officia. Ut id inventore enim natus. Quibusdam quidem dolorem enim enim explicabo ratione ut. Dolor tempora unde eos consequatur explicabo doloribus ab aliquid. Perspiciatis ut qui qui. Laboriosam omnis facilis autem neque ullam voluptas quis voluptate.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...