Borg Security Systems Is Considering the Sale of 12,000 Shares

question 109

Multiple Choice

Borg Security Systems is considering the sale of 12,000 shares of stock to finance development of a new security product.The firm has 40,000 shares of common stock outstanding,par value of $1.00 per share.The firm has $60,000 in additional paid-in capital and $80,000 in retained earnings.Borg's investment bankers estimate that new shares will bring in $5.15 per share.If Borg goes ahead with the new stock issue,what will be the change in book value per share?

• A) −$1.00
• B) +$0.15
• C) +$0.56
• D) +$1.00
• E) $0

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