how to calculate the number of shares in company

how to calculate the number of shares in company - formula for calculating Earnings per Share : To determine the number of shares to be offered to a current shareholder pursuant to preemptive rights to maintain ownership percentage, you must first determine the basis on which the calculation of the holder’s ownership is to be made {e.g., fully diluted including all options in pool, fully diluted excluding ungranted options, based on shares actually outstanding [on an as-converted basis], including warrants, etc.)

In a venture-backed company, these rights typically will be contractural rather than statutory {i.e., pursuant to the company’s charter or state incorporation laws). The calculation of statutory preemptive rights will vary depending on the law of the state of incorporation.

The actual number of shares to be offered to existing investors pursuant to preemptive rights is the difference between the aggregate offering size and the shares to be offered to new investors.

To calculate the aggregate offering size, use a standard “gross up” calculation by dividing the number of shares being offered to new investors other than the holder(s) with preemptive rights by a fraction which is (1 – [the holder's percentage ownership of the company after making the determination above]). For example, if the company proposes to offer 8,000,000 shares to new investors prior to the offering the existing investor with preemptive rights owns 5% (or .05) of the company then the existing investor would have the right to purchase the following number of shares:

Aggregate Offering:

8,000,000/(1 – 0.05) = 8,000,000/(0.95) = 8,421,053
Offering to Existing Investor: 8,421,053 – 8,000,000 = 421,053

How To Calculate Number of Shares to be Offered to Existing Investors venturedig.com
I attended a venture finance event a while back in Palo Alto, which was put on DLA Piper. They had a nice segment on legal aspects of venture finance and law Read More...

How to Calculate Earnings per Share (EPS) fghi.info
Earnings per Share is the allocation of a company’s net income to each outstanding common share of stock. Earnings per Share is used by Wall Street & other stock market analysts to measure the profitability of a company versus another company in the same industry, plus is a way of evaluating quarterly financial results of the company Read More...

Earnings Per Share - How to Calculate EPS stocks.about.com
One of the challenges of evaluating stocks is establishing an “apples to apples” comparison. What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision. Read More...

Calculating a Company's Total Value
The historical information found on a corporation’s financial statements represents only the company’s financial position at some time in the past. No matter how strict accounting practices were adhered to, Read More...

Tag : how to calculate the number of shares in company, how to calculate diluted weighted average, calculating weighted average number of shares, eps average outstanding shares, How to calculate estimated High earning/share, how to calculate net income new fiscal year, year end forecast calculation, How to calculate net loss per share, how to calculate net loss per share for the year end, how to calculate estimated fiscal-year earnings. For the latest updates PRESS CTR + D or visit Stock Market news Today

Related Post: