a. XYZ Corporation had 158 million shares outstanding on January 1, 2009. On February 2, 2009, it

Question:

a. XYZ had 158 million shares outstanding on January 1, 2009. On February 2, 2009, it issued an additional 30 million shares to the market at the market price of $55 per share. What was the effect of this share issue on the price per share of the firm?
b. On February 28, 2009, directors of the same XYZ exercised stock options to acquire 12 million shares at an exercise price of $30 per share. Prior to this transaction the stock traded at $62 per share. What was the effect of the share issue to the directors on the per-share value of the firm?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...