What was the average price (rounded to the nearest dollar) of the additional sha

Question

What was the average price (rounded to the nearest dollar) of the additional shares issued by Levi in 2018?

Shareholders’ equity 12/31/2018 12/31/2017 Common stock, $5 par; 20 million shares authorized; 15 million shares issued
and 9 million shares outstanding at 12/31/2018; and ____ million shares issued
and ____ shares outstanding at 12/31/2017. $ 75 million $ 45 million Additional paid-in capital on common stock 520 million 392 million Retained earnings 197 million 157 million Treasury common stock, at cost, 6 million shares at 12/31/2018 and 4 million
shares at 12/31/2017 (72 million) (50 million) Total shareholders’ equity $ 720 million $ 544 million

Explanation / Answer

Average price of the additional shares = $26 per share

Average price of the additional shares = Proceeds from share issue / Number of additional shares issued

Proceeds from share issue

= Increase in common stock + Increase in additional paid in capital

= [ $75 million - 45 million ] + [ $520 million – 392 million ]

= $30 million + $128 million

= $158 million

Number of additional shares issued = 6 Million Shares

Therefore, Average price of the additional shares

= $158 million / 6 Million shares

= $26.33 per share

= $26 per share [ Rounded ]

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