Enter the gross proceeds ($) and the number of shares issued into the Issue Price Calculator. The calculator will evaluate and display the Issue Price. 

Issue Price Formula

The following formula is used to calculate the Issue Price. 

ISP = GP / S
  • Where ISP is the Issue Price ($/share)
  • GP is the gross proceeds ($) 
  • #S is the number of shares issued 

To calculate the issue price, divide the gross proceeds by the number of shares issued.

How to Calculate Issue Price?

The following example problems outline how to calculate Issue Price.

Example Problem #1:

  1. First, determine the gross proceeds ($).
    1. The gross proceeds ($) is given as: 5,000,000.
  2. Next, determine the number of shares issued.
    1. The number of shares issued is provided as: 100,000.
  3. Finally, calculate the Issue Price using the equation above: 

ISP = GP / #S

The values given above are inserted into the equation below:

ISP = GP / #S = ($/share)


FAQ

What is the significance of calculating the Issue Price?

The Issue Price calculation is crucial for companies and investors as it helps determine the price at which new shares are offered to the public. This calculation aids in understanding the value of the shares and ensuring a fair pricing strategy for both the issuing company and potential investors.

How does the Issue Price affect the stock market?

The Issue Price can significantly impact the stock market, especially if the issuing company is large and well-known. A higher Issue Price might indicate a strong market demand or a positive perception of the company’s value, potentially leading to increased trading activity and interest in the stock. Conversely, a lower Issue Price might suggest caution or a conservative approach to valuing the company.

Can the Issue Price change after it has been set?

Once the Issue Price is set and the shares are issued, the price of the shares in the open market can fluctuate based on supply and demand dynamics. However, the initial Issue Price itself does not change post-issuance. Market conditions, investor sentiment, and company performance are among the factors that can influence the share price following the initial public offering (IPO).