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Hello John,
How he determine the no of shares purchased by ER is 2 Million and thus contributing 1M$. It may be common sense bt I am getting at it. Could you help out pls. ThanksManagement and employees are investing $4M and since the shares are $0.50 nominal value it means they are taking 4/0.50 = 8M shares.
Since ER is taking 20% of the shares, it must mean that management and employees are taking 80% of them.
So 8M shares are 80%, so total number of shares must be 10M and ER take 20% which is 2M. Again they are $0.50 shares, so the amount they contribute is 2M x $0.50 = $1M.
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