Question

arry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company’s stock currently is valued at $50.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $40.00 per share. Larry worries about the value of his investment. Larry's current investment in the company is _____

Answer 1

Answer:

$100,000

Explanation:

Data provided in the question:

Number of shares held by Larry = 2,000

Shares outstanding = 20,000

Current value of stock = $50.00 per share

Number of shares to be issued = 5,000

Issuing price = $40.00 per share

Now,

Larry's current investment in the company

= Number of shares held by Larry × Current value of stock

= 2,000 shares × $50.00 per share

= $100,000