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(a) Describe what it means if a new company decides to issue its ordinary shares to investors in instalments, and why they might sell shares this way.

(a) Describe what it means if a new company decides to issue its ordinary shares to investors in instalments, and why they might sell shares this way.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(a) Describe what it means if a new company decides to issue its ordinary shares to investors in instalments, and why they might sell shares this way.    

 

(b) John’s Building Company needs to raise $100,000 cash from share investors and asks for your advice for designing the sale of the shares. He wants to sell ordinary shares.       

      First, use your imagination to determine a reasonable sale price per share.

      Then, design a traditional 3 step instalment plan for collection of the cash from investors.

      Hint: you may consider that the Application period will commence on 1st February 2022.

      Outline the basic details of your plan, including beginning and ending dates for each stage of your plan.

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