A company issues 500,000 new ordinary shares at $2.00 each. What is the total amount of share capital raised from this issue?

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Question

A company issues 500,000 new ordinary shares at $2.00 each. What is the total amount of share capital raised from this issue?

Accepted Answer

$1,000,000 — Total share capital raised = Number of shares × Issue price per share = 500,000 × $2.00 = $1,000,000. Option A ($250,000) results from dividing instead of multiplying. Option B ($2,500,000) likely arises from an error in place value. Option D ($500,000) confuses the number of shares with the monetary value raised.

Answer

$500,000

Answer

$2,500,000

Answer

$1,000,000

Answer

$250,000

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