RE: Share Issue11 Nov 2020 12:21
Example
Understanding Capital Value
From a capital or market value point of view, selling shares should not significantly change the per share value. Shares going out from the new issue result in cash equal to the value of those shares coming into the company. Consider a hypothetical company with a $100,000 market value and 1,000 shares. Each share is worth $100. If the company sells 100 more shares, it will bring in $10,000. The value of the company should increase by the $10,000 to $110,000 and the number of shares outstanding increase to 1,100, maintaining the $100 per share value