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Hi there, I stuck on notes (Vii) on 1 Sep 2007 there was a fully subscribed rights issue of one new share for every four held at a price of $1.2 each. The proceeds of the issue have been received and the issue of the shares has been correctly accounted for in the above statement of financial position.
The only information available is closing figures of share capital $250,000 and Share premium $40,000 in SOFP, how can I work out the No. of right issue and the No. of share before the right issue?
And Note (Viii) In May 2007 a dividend of 4 cents per share was paid. In Nov. 2007(after the rights issue in items vii above) a further dividend of 3 cents per share was paid. Both divdends have been correctly accounted for in the above statement of financial position.
How to work out total dividend was paid?
Looking at the answer, it didn’t show how to work out no. of share before those dividend was paid, can anyone explain it in more details would be very appreciated.
Thank you very much in advance.
Yanling
If it was a one-for-four, then the number of shares in issue NOW must be 5/4 of the number before the rights. So, there must have been 2m in issue before – a one-for-four would then involve a further 2m/4 ( = 500,000 ) to add to the original shares. That gives 2m + 500k = 2.5m today
Is that clear?
Now you know the number of shares is issue at each dividend payment date, you can work out the dividends paid on each of the two dates
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thanks so much this has cleared my confusion
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