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Company D has 10,000 common shares outstanding. The nominal and market value of the share is...

Company D has 10,000 common shares outstanding. The nominal and market value of the share is 10 and 21 euros respectively. The company decided to increase its share capital by 30,000 euros by issuing a similar number of shares at the price of 15 euros. Also, the company decided to invite the old shareholders to cover the share capital increase. Calculate the number of new shares, the number of options (in three ways) and the price of the non-preferred stock (in two ways).

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Expert Solution

Calculation is based on IFRS - 33 and based on my understanding and beleif.

As provided in the question company currently have 10000 common shares out standing. And have decided to increased share capital by 30000 euros by inviting to the old share holder i.e. Right issue
1. Nos Of New shares
= 30,000 euros / 15 euro
= 2000
2. numebr of options of right issue
As calculated above company will issue 2000 new share to 10000 old share that means 1 new share will be issued to every 5 share (2000/10000)
= 2000/10000
= 0.2 or 1 new share will be issued to every 5 share
3. Price if non-preferred Stock
Ex- right Price
= [(Old nos of share x MV) + new issue value ]/ [old nos of share + new nos of share]
= [(10000 x 21) + 30000] /[10000+2000]
= €    20.00
Value of Right
= MV- Theoritical Ex- right Price
= 21-20
= €       1.00

ekkarill92 answered 1 year ago
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