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13.01.10 Issue of EquityThe Company announces...
Question
13.01.10 Issue of EquityThe Company announces that, following the exercise of options, it has issued 125,000 new ordinary shares of 1p each in the Company ("Ordinary Shares") at an exercise price of 42p per share. ... As I am a beginner, can you explain how 1p costs 42p. Many Thanks. - Posted by Cervantes
Answer
ANSWER 23rd January 2010
Hi Cervantes
The 1p is the nominal value of the shares. All shares have a nominal value, like Barclays Bank shares are 25p nominal. This comes from when the shares were first issued (the authorised share capital divided by the number of shares). It bears no relation to the share price in the market.
Let's say you have a company and you start it with £100 of capital. You could then make 100 shares of £1 each or 1000 shares of 10p each. As the company grows by making a profit those same shares will retain their nominal value whilst their value, or share price will go up.
Thanks for submitting questions: why not use the forum, it may be easier for me to help you further.
Hi Cervantes
The 1p is the nominal value of the shares. All shares have a nominal value, like Barclays Bank shares are 25p nominal. This comes from when the shares were first issued (the authorised share capital divided by the number of shares). It bears no relation to the share price in the market.
Let's say you have a company and you start it with £100 of capital. You could then make 100 shares of £1 each or 1000 shares of 10p each. As the company grows by making a profit those same shares will retain their nominal value whilst their value, or share price will go up.
Thanks for submitting questions: why not use the forum, it may be easier for me to help you further.
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