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To calculate the weighted average number of shares, why is the number of shares before the Rights issue 80m? i got 100m shares($50 m/$0.50)
likewise, why is the number of shares after Rights issue 100m? i got 125m shares (100m + 25m new shares(RI) )
I think probably the dates are important here. What date is given in the question when the share capital was $50 million? And what date was the rights issue?
The following trial balance relates to atlas at 31 march 2013:
Equity shares of 50cents each $50m
Date of rights issue : 1 july 2012.
So the 100 million shares was AFTER the rights issue of 1 for 4
Therefore the number of shares BEFORE the rights issue must have been 80 million so a 1 for 4 rights issue would involve 80m/4 = 20m
Ah!
But i have a qn. Why for the atlas question the share capital is treated as if it was at the year end.
Whereas for dec 2012 Quincy question, the share capital is treated as if it was at the begining of the year.
How to tell the difference ?
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