1 Once upon a time, when you bought broccoli you bought the whole vegetable, stems and crowns. Then it became customary for grocery store produce departments to separate the crowns from the stems and to sell the crowns at a premium. 2  Iâm not a fan of this practice, because I like both parts of the broccoli plant.
A company's first issue of common stock to the public is called an Initial Public Offering. Afterwards, a corporation may issue new equity at any time in order to finance its growth. When new common shares are offered to existing shareholders first, this is called a rights offering.
Using the assumptions above, the price per share for the new investors would be $6.57 per share (mathematical result to arrive at 20% ownership) and the conversion price for the notes would be $4.60 per share ($6.57 minus the 30% discount).