An example
To illustrate, let's consider some information from Realty Income Corporation's (O 0.28%) 2014 annual report. After the financial statements section, the company lists several notes, including one about its common stock issuance:
"In April 2014, we issued 13,800,000 shares of common stock, including 1,800,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares. After underwriting discounts and other offering costs of $22.8 million, the net proceeds of $528.6 million were used to repay borrowings under our acquisition credit facility."
Using the formulas, we can calculate the gross proceeds of the issuance to be $551.4 million. Dividing this by the 13,800,000 shares that were issued, we can calculate the issue price per share to be approximately $39.96.
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