Price of a share after issuance of new shares formula

Tags: equities valuation and pricing

Description of the Price of a share after issuance of new shares formula

Formula for the calculation of the price of a share after the issuance of new shares.

P^{+} = \frac{N \cdot P^{-} + n \cdot P^{i}}{N + n}

N

Number of shares before the new issue

n

Number of new shares issued

P_{-}

Price of the share before issuance

P_{+}

Price of the share after issuance

P_{i}

Issue price of a new share